Chinese Economic Reform and the Growth of Inequality

Abstract

This paper examines the effects of Chinese economic reforms on poverty: first, by considering the net reduction of poverty as measure by the $1/day measure; second, by analyzing the trend toward income disparity. Income disparity presents the problem of poverty in a different way than subsistence level measurement. Marginalized members of society are limited in their capabilities by their lack of access to resources that would enable them to function in society. China is uniquely responsive to income disparity and is attempting to find a way to move forward with trade liberalization and economic development that also addresses the problem of growing income disparity. This paper concludes by evaluating economic policy options to curb increasing inequality. [From Introduction]