Why Is Income Inequality an Important Issue for the...

Why is income inequality an important issue for the Chinese society and its future economic growth? Introduction Nowadays, China has become the second largest economy in the world. The GDP (gross domestic product) of china was growing at 9.7% per year in average since 1978, which the year of Chinese â€Å"open door† politic founded. China also has become the biggest producer and consumer in many key agricultural and industrial markets and the largest FDI recipient among the developing countries. The performance of china in developing of economy is called â€Å"china’s economic miracle†, which be studied by many economists. However, there are also bad results with the development of economy in china such as environment disruption, corruption and†¦show more content†¦The Gini coefficients of rural populations increased about 75% and the urban increased about 113% in these 30 years. Moreover, the aggregate Gini coefficient for China reached 0.4 by 2000, which imply the serious income inequality of China in general. At the same time, the class formation is also getting serious from these 30 years. The income ratios of top 10% urban households was 3 times to the bottom 10% in 1985, but it’s turn to about 9 in 2007, which showed in figure 5. Figure 5 Income ratios of top/bottom 10% urban households, 1985-2007 Although the income inequality is very serious in china, some economists based on â€Å"Kuznetss Inverted U-Curve Hypothesis†, still argue that is good for Chinese economy. The income inequality is the reasonable products of industrialization. They believe that China is in the initial stage of industrialization, so the income inequality is positive to Chinese economy like proving cheap labour force. However, they ignored many serious damage of income inequality to Chinese society and future economic growth. The damage of income inequality The rising urban-rural income inequality made a deeper and deeper gap between urban areas and rural areas. In China, with the rapid development of urbanShow MoreRelatedProblems Faced By The Asian City Of Beijing1917 Words   |  8 PagesConflicts in Measuring Progress The intention to step after the Western growth model can lead the Asian cities to the crisis (Heather, 2012). However, recently, China and India have managed to ensure the economic progress and significant living standards improvements for their economically unstable social groups of the population. At the same time, the Asian Development Bank (ADB) pointed out the rising inequality which can â€Å"soon undermine the very basis of these countries’ economies success† (HeatherRead MoreChina s Long Term Pursuit For Global Modernization2608 Words   |  11 PagesChina’s long-term pursuit for global modernization has led to past issues being re-addressed. 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