Guest Editor's Introduction

The four essays in this issue are taken from thirteen essays that make up China's Retreat from Equality: Income Distribution and Economic Transition, 1988 to 1995 (M.E. Sharpe, forthcoming 2001). Rising inequality has been a common feature of international economic development in the most recent decades, and China is no exception. One of the world's most egalitarian societies in the 1970s, China in the 1980s and 1990s became one of the more unequal countries in its region and among developing countries generally. This retreat from equality has thus been unusually rapid. The Gini coefficient of inequality in household income rose by seven percentage points (18 percent), or by one percentage point per year, between 1988 and 1995.1 Inequality of rural household per capita income rose an estimated 23 percent over the same seven years; urban inequality increased even faster—by 42 percent.2 The reason the Gini ratio for overall inequality for China as a whole, including both urban and rural households, increased at a lower rate than that of either rural or urban distributions, taken separately, is that overall inequality in China is dominated by the large urban-rural income gap.