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Reform, Growth, and Inequality in China

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  • John KNIGHT

Abstract

This paper provides a survey of the literature on inequality in China – level, change, causes, and consequences. It attempts to answer six main questions. How much has inequality risen? What is its relation to poverty alleviation? What has happened to wealth inequality? What are the main dimensions of rising income inequality? The dimensions examined are: the rural–urban divide; urban labor market reform; regional divergence; rural–urban migration; and entrepreneurship, rent‐seeking, and corruption. Was it inevitable that inequality should rise so much? Does it matter that inequality has risen? Income distribution in China is bound up with both economic reform and economic growth. This paper concludes by considering the countervailing forces that will determine the path of inequality in future years.

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  • John KNIGHT, 2008. "Reform, Growth, and Inequality in China," Asian Economic Policy Review, Japan Center for Economic Research, vol. 3(1), pages 140-158, June.
    • Handle: RePEc:bla:asiapr:v:3:y:2008:i:1:p:140-158
    DOI: 10.1111/j.1748-3131.2008.00099.x
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    References listed on IDEAS

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    1. Knight, John & Song, Lina, 1999. "The Rural-Urban Divide: Economic Disparities and Interactions in China," OUP Catalogue, Oxford University Press, number 9780198293309.
    2. Knight, John & Yueh, Linda, 2004. "Job mobility of residents and migrants in urban China," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 637-660, December.
    3. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, vol. 82(1), pages 1-42, January.
    4. Anand, Sudhir & Kanbur, S. M. R., 1993. "Inequality and development A critique," Journal of Development Economics, Elsevier, vol. 41(1), pages 19-43, June.
    5. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
    6. Knight, John & Li, Shi, 2005. "Wages, firm profitability and labor market segmentation in urban China," China Economic Review, Elsevier, vol. 16(3), pages 205-228.
    7. Simon Appleton & John Knight & Lina Song & Qingjie Xia, 2004. "Contrasting paradigms: segmentation and competitiveness in the formation of the chinese labour market," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 2(3), pages 185-205.
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    Cited by:

    1. Chen, Anping & Groenewold, Nicolaas, 2018. "The regional effects of macroeconomic shocks in China," China Economic Review, Elsevier, vol. 48(C), pages 139-154.
    2. Takatoshi ITO & Akira KOJIMA & Colin McKENZIE & Shujiro URATA, 2009. "Editors’ Overview," Asian Economic Policy Review, Japan Center for Economic Research, vol. 4(1), pages 1-18, June.
    3. Bruton, Garry & Sutter, Christopher & Lenz, Anna-Katharina, 2021. "Economic inequality – Is entrepreneurship the cause or the solution? A review and research agenda for emerging economies," Journal of Business Venturing, Elsevier, vol. 36(3).
    4. Yinhua Mai & Xiujian Peng & Peter Dixon & Maureen Rimmer, 2014. "The economic effects of facilitating the flow of rural workers to urban employment in China," Papers in Regional Science, Wiley Blackwell, vol. 93(3), pages 619-642, August.
    5. Cain, J. Salcedo & Hasan, Rana & Magsombol, Rhoda & Tandon, Ajay, 2010. "Accounting for Inequality in India: Evidence from Household Expenditures," World Development, Elsevier, vol. 38(3), pages 282-297, March.
    6. Liu, Dan & Jin, Yanhong & Pray, Carl & Liu, Shuang, 2020. "The Effects of Digital Inclusive Finance on Household Income and Income Inequality in China?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304238, Agricultural and Applied Economics Association.
    7. Shi LI, 2008. "Comment on “Reform, Growth, and Inequality in China”," Asian Economic Policy Review, Japan Center for Economic Research, vol. 3(1), pages 159-160, June.
    8. Chunping Han, 2014. "Health Implications of Socioeconomic Characteristics, Subjective Social Status, and Perceptions of Inequality: An Empirical Study of China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 119(2), pages 495-514, November.
    9. Qi, Jiaqi & Zheng, Xiaoyong & Guo, Hongdong, 2019. "The formation of Taobao villages in China," China Economic Review, Elsevier, vol. 53(C), pages 106-127.
    10. Sadeghi Amroabadi, Behrouz, 2022. "Analyzing the Asymmetric Cumulative Effects of Rentier State on Income Inequality in Mena Countries," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 9(3), pages 113-146, December.
    11. Thomas Gries & Manfred Kraft & Manuel Simon, 2016. "Explaining inter-provincial migration in China," Papers in Regional Science, Wiley Blackwell, vol. 95(4), pages 709-731, November.
    12. Bowles, Paul & Chang, Hongqin & Dong, Xiao-yuan, 2014. "Rural Economy Outcomes in China After Two Decades of Policy Reform," Review of Agrarian Studies, Foundation for Agrarian Studies, vol. 4(2), December.
    13. Alice N. Sindzingre & Christian Milelli, 2010. "The Uncertain Relationship between Corruption and Growth in Developing Countries: Threshold Effects and State Effectiveness," EconomiX Working Papers 2010-10, University of Paris Nanterre, EconomiX.
    14. Menzies, Gordon & Xiao, Sylvia Xiaolin & Dixon, Peter & Peng, Xiujian & Rimmer, Maureen, 2016. "Rural-led exchange rate appreciation in China," China Economic Review, Elsevier, vol. 39(C), pages 15-30.
    15. Anping Chen & Nicolaas Groenewold, 2016. "Output Shocks In China: Do The Distributional Effects Depend On The Regional Source?," Economics Discussion / Working Papers 16-20, The University of Western Australia, Department of Economics.
    16. Martin Piotrowski & Yuying Tong & Yueyun Zhang & Lu Chao, 2016. "The Transition to First Marriage in China, 1966–2008: An Examination of Gender Differences in Education and Hukou Status," European Journal of Population, Springer;European Association for Population Studies, vol. 32(1), pages 129-154, February.
    17. L. V. Dorofeeva & N. A. Roslyakova, 2022. "Transformations of the Socio-Economic Space of Regions: International Experience and Main Trends," Administrative Consulting, Russian Presidential Academy of National Economy and Public Administration. North-West Institute of Management., issue 2.

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