GROWTH, INEQUALITY AND POVERTY REDUCTION IN RURAL CHINA

Abstract

Based on the provincial data on the per capita annual net income, inequality and poverty headcount since 2000, this paper attempts to analyze the impacts of the income growth and distribution on poverty reduction in rural China and explore the situation and causes of rural income inequality by means of econometric model analysis and Gini coefficient decomposition. The results show that the income growth of China’s peasants since 2000 still plays a significant role in reducing rural poverty, but the deterioration of income inequality will partially offset the positive effects of income growth on poverty reduction; the extent of income inequality in rural areas is obviously higher than that in urban areas; income  from wages and salaries is one of the most important determinants which cause rural income inequality, followed by the income from household operations, but the ratio of contribution of the income from properties and transfers to inequality is relatively low..