Narrowing the Gap: Rural-Urban Inequality in China

Narrowing the Gap: Rural-Urban Inequality in China

By most measures, the income gap between urban and rural households in China is one of the largest in the world, with urban residents’ incomes more than triple those of their rural counterparts. Not surprisingly, then, improving rural incomes has become the main target of social welfare policies in China today, though it is too early to tell whether such policies will be enough to reduce the rural-urban income gap. The new social policies have also been introduced in the context of two long-term demographic trends of great significance: China's high-speed urbanization and the rapid aging of its population. China’s social welfare policies are in some respects responses to these trends—aimed at preventing both the formation of a vast urban underclass lacking access to basic means of social protection as well as the impoverishment of the elderly.

Regardless of their future effects on income inequality and urbanization patterns, China’s new social policies carry a political significance that is not well understood. The creation of very large social insurance programs, similar to those found in mature welfare states, is quickly eroding distinctions in access to social protections based on status and geography. Moreover, because social insurance involves people turning over some of their current incomes for future benefits, it has the potential to create in China, as it has elsewhere, powerful expectations for future state support and fierce resistance to government efforts to reduce promised benefits. The new social policies also carry the potential to promote a rebalancing of China's economy toward greater domestic consumption, even if their impact is not likely to be determinant.

Reducing the rural-urban income gap became a central priority for the Chinese Communist Party (CCP) leadership a decade ago, when the problem of rural tax burdens rose to the top of the policy agenda. The agricultural tax was abolished in 2006, to go with earlier measures that had placed limits on what local officials could collect in taxes and fees. Up to a point, the CCP encouraged aggrieved rural residents to pursue justice through the courts, and even through petitions and protests to expose the abuses of local officialdom. The party also subtly encouraged media reports on peasant grievances and efforts to address them through various forms of collective resistance as a way to present the central party and government as on the side of those seeking remedies against local officials.

Keep reading for free!

Get instant access to the rest of this article by submitting your email address below. You'll also get access to three articles of your choice each month and our free newsletter:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having a personal curator and expert analyst of global affairs news. Subscribe now, and you’ll get:

  • Immediate and instant access to the full searchable library of tens of thousands of articles.
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday.
  • Regular in-depth articles with deep dives into important issues and countries.
  • The Daily Review email, with our take on the day’s most important news, the latest WPR analysis, what’s on our radar, and more.
  • The Weekly Review email, with quick summaries of the week’s most important coverage, and what’s to come.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.

More World Politics Review