By Azizur Rahman Khan
China's explosive monetary progress due to the fact that 1988 has now not led to an equivalent elevate of source of revenue between all chinese language electorate. The authors discover a number purposes for the disparity and base their conclusions on powerful empirical evidence--especially the 1996 survey carried out through the nation Statistical Bureau.
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Additional info for Inequality and Poverty in China in the Age of Globalization
Cash wages was the next most rapidly growing component, increasing at an average annual rate of 17%; it was followed by the earnings of retirees, growing by almost 13%. The growth of retirement income reflects the rapid aging of the Chinese population. 7%. The remaining components of urban income had negative real rates of growth. The most remarkable decline occurred in net subsidies (subsidies less taxes), which, as pointed out above, fell from over onefifth of total income to only 1%. Unlike the case of rural China, the change in composition of income in urban China does not indicate an a priori direction of change in the distribution of income.
While the concentration curve for income from family farming closely hugs the "45° line" of perfect income equality, that for wage income bows deeply below it, exhibiting great inequality. The concentration curve for net taxes —a negative income item—soars high above the 45° line, indicating that the poorer households pay a disproportionately high share of taxes; it then falls sharply in representation of the net subsidies received by the richest two deciles of the population. The rich and the poor in rural China, therefore, have very different compositions of income.
The SSB estimate of the rise (51%) is, however, far lower than the rise estimated by our survey (71%). For urban China, there is no SSB range estimate for 1988; SSB's estimate for 1995 is only three-quarters as high as ours. It is impossible to determine to what extent the differences in the estimates of range represent a downward bias in the estimated regional inequality according to the SSB as a result of its incomplete definition of income, and to what extent they stem from larger sampling errors in our estimates.
Inequality and Poverty in China in the Age of Globalization by Azizur Rahman Khan