Income inequalities in China: Stylized facts vs. reality

SummaryThere have been many papers recently (both theoretical and empirical) analyzing the problem of income inequality in China. Most of them usually state that the income inequality in China is growing in two dimensions – among the regions and between the urban and rural areas. Moreover, an opinion that reducing the inequality must be connected with sacrificing some part of economic growth prevails. These results seem to be widely accepted also by the media and politicians.In this paper we provide evidence that the income inequality remains stable in last years and that its relationship with economic growth is very ambiguous. Using the comparison with some other countries, we document that the inequality in both dimensions mentioned above does not change significantly faster than in other countries.