The Quality of China's Household Income Surveys

Much recent research on the Chinese economy has centred on analysing changes in the personal distribution of income in China since 1978. The purpose of this research has been both to delineate the trend in income inequality over time, and to “decompose” this trend into its component parts. Some of the most important recent studies include Azizur Rahman Khan, Keith Griffin, Carl Riskin and Zhao Renwei, “Household income and its distribution in China,” The China Quarterly. No. 132 (December 1992); Keith Griffin and Zhao Renwei (eds.), The Distribution of Income in China (London: Macmillan, 1993); Scott Rozelle, “Stagnation without equity,” The China Journal, No. 35 (January 1996); World Bank, Sharing Rising Incomes (Washington D.C.: World Bank, 1997); Li Shi, Zhao Renwei and Zhang Ping, “Zhongguo jingji zhuanxing yu shouru fenpei biandong” (“China's economic transition and changes in the income distribution”), Jingji yanjiu (Economic Research), No. 4 (April 1998); Azizur Rahman Khan and Carl Riskin, “Income and inequality in China,” The China Quarterly, No. 154 (June 1998); Lin Yifu, Cai Fang and Li Zhou, “Zhongguo jingji zhuanxing shiqi de diqu chaju fenxi” (“An analysis of regional inequalities during China's transition”), Jingji yanjiu (Economic Research), No. 6 (June 1998): Hy Van Luong and Jonathan Unger, “Wealth, power and poverty in the transition to market economies,” The China Journal, No. 40 (July 1998); Tsui Kai-yuen, “Factor decomposition of Chinese rural income inequality,” Journal of Comparative Economics, Vol. 26, No. 3 (September 1998); Li Shi and Zhao Renwei, “Zhongguo jumin shouru fenpei zaiyanjiu” (“The Chinese income distribution revisited”), Jingji yanjiu, No. 4 (April 1999); Dennis T. Yang, “Urban-biased policies and rising income inequality in China,” American Economic Review, Papers and Proceedings (May 1999); Li Shi, Zhao Renwei and Carl Riskin (eds.), Zhongguo jumin shouru fenpei zaiyanjiu (The Chinese Income Distribution Revisited) (Beijing: Zhongguo caizheng jingji chubanshe, 1999). Important early studies include E. B. Vermeer, “Income differentials in rural China.” The China Quarterly, No. 89 (1982); Lee Travers, “Bias in Chinese economic statistics,”The China Quarterly, No. 91 (1982) and Irma Adelman and David Sunding, “Economic policy and income distribution in China,” Journal of Comparative Economics, Vol. 11, No. 3 (September 1987). This list takes no account of the large number of studies which have looked at the distribution of per capita output using data on gross output value, net material product and GDP. The central conclusions to emerge are that income inequality has increased sharply during the transition era, and that spatial factors – particularly a rise in inter-provincial income differentials and an increase in the urban–rural gap – have played a key role in the process. The policy conclusion which has usually been drawn is that the Chinese state needs to dismantle the remaining restrictions on labour mobility because these have served to prevent the fruits of growth from “trickling down” from urban areas and the eastern provinces to the Chinese hinterland.