By using the five waves of the China Household Income Project surveys conducted during 1988-2013, this paper investigates long-term changes in income inequality and poverty in China. Income inequality rose before 2007 and then fell by a small amount. The main reason for the rise in income inequality was that high-income percentiles had faster income growth than lower percentiles; the fall in income inequality implies faster income growth among low-income percentiles. The paper also indicates a considerable poverty reduction during China's economic transition, mainly because of the growth effect of poverty decomposition.
income inequality poverty Gini decomposition GE decomposition poverty decomposition