ASSESSING THE CURRENT INCOME DISTRIBUTION IN CHINA AND ITS SOCIAL POLICY IMPLICATIONS

    China can be regarded as an emerging economy power. The country currently possesses quarterly GDP growth of approximately 10%, mainly sustained through strong export performance. However, although China had enjoyed substantial economic resurgence and rapid economic growth, the country still experiences several development challenges. Chen and Fleisher (1996) remarked that one of the most hazardous issues currently plaguing China is the increasingly widened gaps between different citizen groups in China; particularly by the income inequality between rural-urban household.  Goh et al. (2009) noticed that although China had been experiencing steady economic growth since its economic reform, there have been widening gap between Chinese rural-urban citizens and the income inequality gap in China had reached its peak in more than 3 decades in 2009, where the National Bureau of Statistics of China reported that rural citizens’ earnings represents only one-third of urban citizens’ earnings; with the disposable income per capita for urban household at RMB19109 and  disposable income per capita for rural household amounting to only RMB5919 in 2010 (NBS, 2009). Interestingly enough however, the income disparity was observed to be at its lowest point in 1983, where Zhong (2011) argued that this is caused by the implementation of Household-responsibility system introduced by the Chinese government in 1978. This suggests that it is actually possible to mitigate the issues of social inequality by introducing adequate government social policy system. However, it is also important to note that the conditions of Chinese economies as of today represents a totally different environment from the pre-reform Chinese economies, hence it would be important to re-assess the current Chinese economic environment and the characteristics of the economic disparity nowadays to analyse the implications before a sound recommendations for the establishment of new policy can be made, to mitigate this economic disparity problem without necessarily jeopardising China’s economic achievements.   1. What are the current income disparity conditions between the rural-urban regions in China?2. Why the previous adoption of Household-responsibility system had been unable to mitigate the income disparity issues in the rural-urban regions in China?3. What are the policies that can be developed to mitigate the income disparity issues in China nowadays?