Poverty, Inequality, and Social Disparities During China's Economic Reform

China has been the most rapidly growing economy in the world over the past 25 years. This growth has fueled a remarkable increase in per capita income and a decline in the poverty rate from 64 percent at the beginning of reform to 10 percent in 200...

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Bibliographic Details
Main Author:	Dollar, David
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCESS TO EDUCATION ADULT POPULATION AGRICULTURAL GROWTH AGRICULTURAL LAND AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AVERAGE LEVEL BASIC EDUCATION BASIC SOCIAL SERVICES CAPITAL ACCOUNT CAPITAL CONTROLS COMPARATIVE ADVANTAGE COMPETITIVE EXCHANGE COMPETITIVE EXCHANGE RATE CULTURAL CHANGE DECENT HEALTH CARE DEMAND SIDE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC REVIEW ECONOMIC THEORY EDUCATED PEOPLE EDUCATIONAL ATTAINMENT ENVIRONMENTAL DEGRADATION EXCHANGE RATE EXTREME POVERTY FARMERS FOREIGN TRADE GLOBAL ECONOMY GOVERNMENT POLICIES GROWING ECONOMY HEADCOUNT RATIO HEALTH INSURANCE HEALTH OUTCOMES HIGH GROWTH HIGH GROWTH RATE HIGHER INEQUALITY HOSPITAL HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME DISTRIBUTION INCOME GAP INCOME INEQUALITY INCOME STUDY INCREASED INEQUALITY INCREASING INEQUALITY INDUSTRIAL SECTOR INDUSTRIALIZATION INDUSTRIALIZED COUNTRIES INFANT INFANT MORTALITY INFANT MORTALITY RATE INTERNATIONAL POLICY INTERNATIONAL TRADE INVESTMENT CLIMATE JOB CREATION LABOR MARKET LABOR PRODUCTIVITY LABOR SHORTAGES LARGE POPULATION LAWS LEGAL RIGHTS LIFE EXPECTANCY LIVING STANDARDS LOCAL GOVERNMENTS LONG RUN LOW-INCOME COUNTRIES MIGRANT MIGRANTS MIGRATION MINORITY MULTINATIONAL COMPANIES NATURAL RESOURCE NUTRITION OPEN DOOR PATIENT PER CAPITA GROWTH PER CAPITA INCOME PERSONAL INCOME POLICY MEASURES POLICY OPTIONS POLICY RESEARCH POLICY RESEARCH WORKING PAPER POOR POOR AREAS POOR COUNTRY POOR FAMILIES POOR HOUSEHOLDS POPULOUS COUNTRY POSITIVE IMPACT POVERTY HEADCOUNT POVERTY LEVEL POVERTY LINE POVERTY RATE POVERTY REDUCTION PRICE STABILITY PRIMARY EDUCATION PRIMARY HEALTH CARE PRIMARY SCHOOL PRIVATE CONSUMPTION PRIVATE SECTOR PRODUCTIVITY GROWTH PROGRESS PROPERTY RIGHTS PUBLIC EXPENDITURE PUBLIC GOODS PUBLIC HEALTH PUBLIC HEALTH SERVICES PUBLIC SERVICES PUBLIC SPENDING PUBLIC SUPPORT PURCHASING POWER PURCHASING POWER PARITY QUALITY OF EDUCATION RAPID GROWTH REAL INCOMES REFORM PROGRAM RICH COUNTRIES RISING INEQUALITY RURAL RURAL AREA RURAL AREAS RURAL BASIC EDUCATION RURAL DEVELOPMENT RURAL HEALTH RURAL INCOME RURAL LIVING STANDARDS RURAL POPULATION RURAL PUBLIC RURAL RESIDENTS SAFETY NET SAFETY NETS SAVINGS SERVICE DELIVERY SKILLED PROFESSIONALS SKILLED WORKERS SOCIAL EXPENDITURES SOCIAL OUTCOMES SOCIAL PROTECTION SOCIAL SECURITY SOCIAL SERVICES SOCIAL SPENDING STATE INTERVENTION STRUCTURAL POLICIES SURVIVAL RATE TRADE LIBERALIZATION UNIVERSITY EDUCATION URBAN AREAS URBAN MIGRATION URBAN POPULATION URBAN WORKERS URBANIZATION WORKING CLASS
Online Access:	http://documents.worldbank.org/curated/en/2007/06/7716207/poverty-inequality-social-disparities-during-chinas-economic-reform http://hdl.handle.net/10986/7404

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Summary:	China has been the most rapidly growing economy in the world over the past 25 years. This growth has fueled a remarkable increase in per capita income and a decline in the poverty rate from 64 percent at the beginning of reform to 10 percent in 2004. At the same time, however, different kinds of disparities have increased. Income inequality has risen, propelled by the rural-urban income gap and by the growing disparity between highly educated urban professionals and the urban working class. There have also been increases in inequality of health and education outcomes. Some rise in inequality was inevitable as China introduced a market system, but inequality may have been exacerbated rather than mitigated by a number of policy features. Restrictions on rural-urban migration have limited opportunities for the relatively poor rural population. The inability to sell or mortgage rural land has further reduced opportunities. China has a uniquely decentralized fiscal system that has relied on local government to fund basic health and education. The result has been that poor villages could not afford to provide good services, and poor households could not afford the high private costs of basic public services. Ironically, the large trade surplus that China has built up in recent years is a further problem, in that it stimulates an urban industrial sector that no longer creates many jobs while restricting the government's ability to increase spending to improve services and address disparities. The government's recent policy shift to encourage migration, fund education and health for poor areas and poor households, and rebalance the economy away from investment and exports toward domestic consumption and public services should help reduce social disparities.

Poverty, Inequality, and Social Disparities During China's Economic Reform

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