Question

1) What is the unique feature of income inequality in China?

2) What were the causes of urban-rural income disparity before the economic reform in China?

Answer 1

Income Inequality in China
China has faced an increase in income inequality to its post economic reforms from 1978. The unique feature is the inland-coastal disparity in the nation after the implementation of the reforms. From the mid of 1980’s, China grown tremendously as an economy through increased rate of GDP growth. Along with the rise in the rate of GDP, the economy starts facing income inequality especially in the rural and urban sector. The disparity grew large between the both. The industrial trends in the economy helped the urban sector to develop and increase the level of income. Even though the economic reforms could reduce the level of poverty, it was not able to manage the problem of increasing disparity in the income. The rural sector couldn’t achieve much with the reforms made for the growth of economy. China, producing with less cost for factors of production especially in the rural sector forced the disparity to rise up to the peak. Depending more on the industries, the economy failed to look after the rural sector encouraging it to produce better.
Even though the pre-reform period in China faced less disparity in income because of the egalitarian mode of distribution, the nations faced different problems including the Great Famine in the late 1950’s and the Cultural Revolutions in the late 1960’s and 1970’s. These had notable effects on the disparity in income of the country before the economic reforms. Even the country tried to manage the disparity level adopting egalitarian concept which calls for equal distribution of income to all, these all factors affected the level of disparities to various levels.