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CHINA’S INCREASING INEQUALITY OF WEALTH: PIKETTY WITH CHINESE CHARACTERISTICS?
NOV 2018 | 862
Authors: John Knight LI Shi, WAN Haiyuan
John Knight, LI Shi and WAN Haiyuan
The inequality of wealth in China has increased rapidly in recent years. China presents a fascinating case study of how inequality of household wealth increases as economic reform takes place, marketisation occurs, and capital accumulates. Wealth inequality and its growth are measured and decomposed using data from two national sample surveys of the China Household Income Project (CHIP) relating to 2002 and 2013. An attempt is made to explain the rising wealth inequality in terms of the relationships between income and wealth, differential saving, house price inflation, and income from wealth. This last relationship is stressed by Thomas Piketty in his 2014 book. In China the evidence for it is weak, but there is support for a reformulation that includes real capital gain as part of income. Piketty’s mechanism is relevant, but only ‘with Chinese characteristics’.
JEL Codes: C80; D31
Keywords: China; Housing inequality; Piketty; Wealth inequality; Capital gain.
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President Xi Jinping heaped lavish praise on French economist Thomas Pikkety’s first book Capital in the 21st Century, which critiqued the failings of capitalism
But Pikkety says his latest book on inequality is unavailable in the mainland because he has refused to allow sections critical of China’s wealth gap to be censored
Published: 6:50pm, 30 Aug, 2020
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