• Rural-urban disparity and the
wealth gap Since the reform and opening up in
China began, income inequality has increased significantly. The Gini Coefficient, an income distribution gauge, has worsened from 0.3 back in 1986 to 0.42 in 2011. Poverty researchers recognize anything above 0.4 as potentially socially destabilizing. The growing wealth gap can be seen as a byproduct of China's economic and social development policies. The
reform and opening up were carried out in two stages. The first stage, in the late 1970s and early 1980s, involved the de-collectivization of agriculture, the opening up of the country to foreign investment, and permission for entrepreneurs to start businesses. A large percentage of industries still remained state-owned. The second stage of reform, in the late 1980s and 1990s, involved the privatization and contracting out of much state-owned industry. The 1985 lifting of price controls was a major reform, and the lifting of protectionist policies and regulations soon followed, although state monopolies in the commanding heights of the economy such as banking and petroleum remained. These reforms may have resulted in the adverse effects of having a widening inequity between the rich and the poor which subsequently may cause social and political instability, discrimination in access to areas such as public health, education, pensions and unequal opportunities for the
Chinese people. The
inequality in income in China can also be seen as a rural-urban income gap especially with the widely criticized social development policy, the Hukou (household registration) System in place. Market income – mainly wages – has been the driving factor in shaping urban income inequality since the reform and opening up in
China while the widening rural-urban income gap is due to low salaries for employees and migrants in many companies coupled with rapidly growing profits for the management of State-owned enterprises, real estate developers and some private companies. The urban per capita net income stood at 17,175 yuan ($2,525) in 2009, in contrast to 5,153 yuan in the countryside, with the urban-to-rural income ratio being 3.33:1, according to figures from the
National Bureau of Statistics. The
Hukou System has been long seen as an institutionalized source of inequality and disparity among the population and source of population control seen a deterrence factor for rural citizens to seek a higher standard of living in the cities as rural citizens will be denied access to urban housing and education for their children. It is also seen as a legacy of the dualistic economy, serving as a highly effective measure of limiting urban migration. • Coastal-hinterland imbalance •
Digital divide ==Employment==