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Wealth Accumulation and Distribution in Urban China

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  • Xin Meng

Abstract

Under socialism it was neither possible nor necessary to accumulate significant levels of personal wealth. The acceleration of economic reform in the last decade, however, has brought dramatic increases in income and investment opportunities. Reform has also reduced social protections provided by the state welfare system. In response to these changes, between 1995 and 2002, urban average real household net total wealth increased by 24% per annum. There is a concern, however, that those accumulating wealth are the economic and political elites, while those unable to accumulate wealth are the most vulnerable workers, who are losing social protection. Using Chinese urban survey data of 1995, 1999, and 2002, this article investigates this issue. It is found that households with above-average income have accumulated more wealth than their poorer counterparts. In addition, a large proportion of this wealth accumulation may be from nonearned sources, such as buying larger and better housing at highly subsidized prices. Furthermore, party members and their children have benefited a great deal from this fast wealth accumulation process. Although at lower rates, the poor and vulnerable have also been able to accumulate wealth.

Suggested Citation

  • Xin Meng, 2007. "Wealth Accumulation and Distribution in Urban China," Economic Development and Cultural Change, University of Chicago Press, vol. 55(4), pages 761-791, July.
  • Handle: RePEc:ucp:ecdecc:v:55:y:2007:p:761-791
    DOI: 10.1086/516761
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    5. Zibei Chen & Minchao Jin, 2017. "Financial Inclusion in China: Use of Credit," Journal of Family and Economic Issues, Springer, vol. 38(4), pages 528-540, December.
    6. Sen Xue, 2018. "Does contact improve attitudes towards migrants in China? : Evidence from urban residents," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(2), pages 149-200, April.
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    8. Hiroshi Sato & Terry Sicular & Ximing Yue, 2011. "Housing Ownership, Incomes, and Inequality in China, 2002-2007," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 201112, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    9. , Matteo & Yang, Li, 2023. "The Impact of Communist Party Membership on Wealth Distribution and Accumulation in Urban China," SocArXiv y4pwa, Center for Open Science.

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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