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China’s Increasing Inequality of Wealth: Piketty with Chinese Characteristics?

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  • John Knight
  • LI Shi
  • WAN Haiyuan

Abstract

John Knight, LI Shi and WAN Haiyuan The inequality of wealth in China has increased rapidly in recent years. China presents a fascinating case study of how inequality of household wealth increases as economic reform takes place, marketisation occurs, and capital accumulates. Wealth inequality and its growth are measured and decomposed using data from two national sample surveys of the China Household Income Project (CHIP) relating to 2002 and 2013. An attempt is made to explain the rising wealth inequality in terms of the relationships between income and wealth, differential saving, house price inflation, and income from wealth. This last relationship is stressed by Thomas Piketty in his 2014 book. In China the evidence for it is weak, but there is support for a reformulation that includes real capital gain as part of income. Piketty’s mechanism is relevant, but only ‘with Chinese characteristics’.

Suggested Citation

  • John Knight & LI Shi & WAN Haiyuan, 2018. "China’s Increasing Inequality of Wealth: Piketty with Chinese Characteristics?," Economics Series Working Papers 862, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:862
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    References listed on IDEAS

    as
    1. Thomas Piketty & Gabriel Zucman, 2014. "Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(3), pages 1255-1310.
    2. Knight, John & Ding, Sai, 2012. "China's Remarkable Economic Growth," OUP Catalogue, Oxford University Press, number 9780199698691.
    3. Gustafsson,Björn A. & Shi,Li & Sicular,Terry (ed.), 2008. "Inequality and Public Policy in China," Cambridge Books, Cambridge University Press, number 9780521870450, January.
    4. Chuliang Luo & Terry Sicular & Shi Li, 2017. "Overview: Incomes and Inequality in China, 2007-2013," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 201713, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    5. repec:hal:pseose:halshs-01109372 is not listed on IDEAS
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    JEL classification:

    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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