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Introduction: Growing Inequality in China

Since the start of the economic reform process in China a quarter of a century ago, there have been spectacular increases in per capita income and equally spectacular reductions in income poverty. However, interpersonal/interregional inequality in incomes and in social indicators has increased dramatically, particularly in the last decade. Scholars have vigorously compiled the basic facts of inequality throughout the last decade, and there is now no doubt about the magnitude of the phenomenon. However, there remains a lack of understanding of the causes of this increase, its consequences for social stability and economic productivity, and appropriate policy responses. Against this background, Cornell University, IFPRI and WIDER organized an international conference ‘Growing Inequality in China: Causes, Consequences and Responses’ at Cornell University from 25 to 26 September 2004. From among a larger number of submissions, 15 papers were selected for presentation at the conference. Following the standard review process of this journal, six of the 15 papers were accepted for publication in this special issue. The six papers in this special issue cover a range of different perspectives on inequality in China, starting from seeing Chinese inequality in a global perspective, through regional inequality within China, to specific sectoral and policy issues such as taxation, foreign direct investment, and health inequality. Together, they provide an overview of issues that policymakers will have to face as they balance growth with equity in China’s development path. We now consider the papers in turn. In ‘Half a World: Regional Inequality in Five Great Federations,’ Branko Milanovic compares spatial and regional inequality in several populous countries: China, India, the United States, Indonesia and Brazil. Because global inequality depends heavily upon the average income levels and inequality within populous nations, it is