ABSTRACT
In 2003, China’s economy grew by 9.1 percent. Yet the number of rural poor officially increased by 800,000, the first such officially announced increase in the past quarter century of reform and transition (see Xinhua News Agency 2004). The correspondence of rapid growth and increased poverty strongly suggests that inequality, as measured by the Gini coefficient, increased in 2003.1 Yet findings from household income surveys carried out for 1995 and 2002 indicate that income inequality actually declined between those two years. The apparently contrary data for 2003 raise questions about the causes and sustainability of that decline, and that is the subject of this chapter.
