China is in the midst of a major transition from a centrally planned to a more marketoriented economy, and from a predominantly rural to a more urbanized society. This is occurring as its national income is growing strongly and as its population is ageing very rapidly (Whiteford 2003). There is great interest in the impact of these changes on the living standards of the population and on the extent and nature of poverty and inequality. In addition, the sheer size of China’s economy and population guarantees that these changes will have a major impact on how the global economy is affected by changes in trade liberalization, market competition and other factors.