China 's Income Inequality Essay

1651 Words Nov 3rd, 2016 7 Pages
China’s income inequality started rising when the country’s adapted central planning where attempt to boost fast growth of heavy industries in urban areas when they launched market-oriented reforms and opened the economy in 1978. However, this Chinese economic growth has helped many people get out of poverty. But there are people still suffering from absolute poverty from long-term unemployed, low-income households, rural-urban migrant workers and farmers living in rural areas today.

The incomes of the poor have been growing, yet it appears that the rich are also getting richer much faster. This is due to development policies that favor only in heavy industry, cities and special economic zones in coastal areas. As a result, urban residents earned approximately twice more than those in rural areas, while the income of rural residents in coastal area earned tripled.

The China’s Gini coefficient indicates economic inequality has grown sharply over the past two decades. Since the 1980s, income inequality in China has raised at a faster pace, therefore China’s Gini coefficient for family net wealth was 0.45, but by 2012 it had risen to 0.73. China has the highest Gini coefficient among G7 country follow by the UK and Italy.

Even with China’s recent improvement in poverty there are still over 250 million people living on less than $2/ day. Most of them living in rural areas where government implemented policy has failed to make impact. There are several major causes of…

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