Reducing inequality will become harder for China

Subject

Inequality in China.

Significance

The income gap between rich and poor has begun to narrow again after two decades of rising inequality, and there is strong evidence that this is a result of government policy.

Impacts

• Rising disposable incomes among poorer households will help rebalance the economy.
• Policies such as raising minimum wages and improving protection for casual workers may be abandoned.
• Inequality is quite high by international standards and still at a level that has the potential to cause social instability.