ABSTRACT
Introduction Economic reform has improved the standard of living of the Chinese over the past three decades and lifted tens of millions out of poverty, but it has come at the cost of large increases in inequality. At the start of economic reform in the late 1970s China was one of the most equal societies in Asia, despite differences between rural and urban populations and across regions. In general though, those differences in income and welfare were relatively compressed. Studies of household consumption and income over the past decade show that China has become one of the ‘most unequal’ in Asia (Khan and Riskin 1998; Riskin et al. 2002; UNDP 2005; Brandt and Rawski 2008). Differences between urban and rural populations, within cities and villages, and between and within regions are among the inequalities that pose huge economic, political and social challenges for the Chinese State, which were recognized in the policy pronouncement of the 2007 Chinese Communist Party Congress (Yao and Morgan 2008).
