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Income Inequality in China

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Regan Law

on 12 January 2014

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Transcript of Income Inequality in China

Income Inequality in China
Impact of income inequality in China
negative impact
positive impact
Implications for Sustainability
Sustainability for humans, sustainability is the potential for long-term maintenance of well being, which has ecological, economic, political and cultural dimensions. Sustainability requires the reconciliation of environmental, social equity and economic demands - also referred to as the "three pillars" of sustainability.(Wikipedia)

Implications for Social sustainability
Economic impact
social impact

Positive impact

(only for reasonable and moderate income inequality)

Low Public Expenditure on Education
Low and imbalanced public expenditure on education
Income inequality is the difference between individuals or populations in the distribution of their assets, wealth, or income.
Gini Coefficient
Immature redistribution system
Government monopolized industries
Labour market
Out-of-pocket payment per capita as a percentage of average annual household consumption expenditure per capita (%) for the urban and rural population in 2000-2010.

Crime rate

Social status

Ascribed status Achieved status

The gap between education level
Implications for Economic sustainability
Domestic demand decrease

Rely on oversea trade.

Economy collapse.

Public expenditure on education as % of GDP is the total public expenditure (current and capital) on education expressed as a percentage of the Gross Domestic Product (GDP) in a given year.
Implications for Environment sustainability
The income inequality --Some areas are forced to chose development path (not environmentally friendly ).
This will finally damage the environment in these regions.

Imbalanced expenditure on education
The factory in Wuhai,Inner Mongolia.

Immature Labour market
Overview of negative impact
Government monopolized industries
The income of employee in monopoly industries is 4.25 time to the income of employee in private sector. Even inside the monopolized industries, the salary gap is becoming larger than before. Lollar also shows that salary of senior managers may easily exceed 1 million yuan ($125,410) a year, and a regular worker can make as much as 8,000 yuan ($1,000) a month.

1.Domestic domestic demand decrease

Economic impact
Impractical Redistribution System
Regional inequality
Economic impact


overdependence on exporting

Insufficient domestic demand

manufactures turn to foreign market

overdependence on exporting

Social impact


Crime rate has also been shown to be correlated with inequality in society

Social impact


Trapped in a vicious circle

Low income

low educational investment

low competitive power
of next generation

Social impact


less community involvement

social connectedness


cancer, diabetes, heart disease, hepatocirrhosis, trachitis
Life expectancy

chemical dependency
less community life
parenting problems
stress-related diseases

Health impact
To stimulate the people's initiative

Arose the enthusiasm of job

Take advantage of human resource

Economic growth

Example: The global financial crisis of 2008 caused many export enterprises closed down.
Low public expenditure on education
Immature redistribution system
Government monopolized industries
Labour market reform
Economic impact
social impact
Implications for Sustainability


Political advantage
Labour from rural areas
Story: In 1996, Redundancy Trend
Low welfare to the poor
Low taxation to the rich (Personal Income Tax)
Urban areas
Rural areas
Coastal ares

Internal areas
State-owned sector
Private sector

Fortune 500 2013
Full transcript