Income distribution in China – additional information
Annual per capita income in Chinese urban areas saw a significant rise over the last two decades. Between 1995 and 2017, the annual income of urban households in China had grown from 4,279 to 36,396 yuan.
As an emerging economy, China faces a large number of development challenges, one of the most pressing issues being income inequality. The growing income gap between rural and urban areas has been stirring social unrest in China and poses a serious threat to the dogma of a “harmonious society” proclaimed by the communist party. As of 2016, annual per capita disposable income of urban households had amounted to approximately 34,000 yuan, whereas rural households had an income of less than 13,000 yuan.
Coinciding with the urban-rural income gap, income disparities between coastal and western regions in China have become apparent. As of 2016, households in Shanghai had displayed the highest average annual income of about 58,000 yuan, followed by Beijing with 57,000 yuan and Zhejiang province with 47,000 yuan. Gansu, a province located in the Northwest of China, had the lowest average annual household income in China with merely 26,000 yuan.
China’s official Gini coefficient, the most commonly used measure of income inequality, indicates also the astonishing inequality of income distribution in China. In 2016, China had reached a score of about 47 points. The United Nations have set an index value of 40 as a warning level for serious inequality in a society.