Chinese income inequality far surpasses that of the US due to rapid economic growth

Income inequality in China has now exceeded that of the US and other countries of similar or higher standards of living, University of Michigan research has found.

University of Michigan sociologist Yu Xie and colleague Xiang Zhou used large-scale survey data from the Peking University Institute of Social Science, and six other Chinese universities, to determine the income inequality. The internationally recognised measure of inequality, the Gini coefficient, found family income in China is 0.55 compared to 0.45 in the US. Comparably, in 1980, China’s Gini coefficient was 0.30.

The gap between rich and poor is considered “severe” when a Gini coefficient reaches 0.5.

Researchers suggest an explanation for the drastic widening of the inequality gap may be due to rapid economic growth in China from 1978 onwards, and the favouring of urban residents by Chinese governmental development policies, compared to rural residents.

Read more at University of Michigan