Appraising Income Inequality in China

Income inequality is a serious and growing problem in China, and the impact of wealth and income inequality is clearly observable in China’s consumer market dynamics. Scholarship on the topic indicates that, if left unconstrained, income inequality results in ever-higher levels of wealth concentration at the top, effectively hollowing out the middle class and decreasing the welfare of the lowest income earners. This dynamic creates a drag on economic growth and agitates social unrest. Xi Jinping’s proclaimed “war on poverty” constitutes, in part, an attempt to address the most severe aspects of income inequality and is a cornerstone of China's 13th Five-Year Plan. This slide deck collates the most recent data available to illuminate the income inequality situation in China.