INDUSTRIALIZATION AND SPATIAL INCOME INEQUALITY IN RURAL CHINA, 1986-92

Rural industrialization has been a dominant factor responsible for Chi na's rapid economic growth over the last 18 years, but it has been acc ompanied by increased inter-regional income inequality. Using the most recent rural income data and two alternative Gini coefficient decompo sition methods, this study finds that income inequality, especially in ter-regional income inequality increased significantly in the period 1 986-92. More than half of national income inequality was due to its in ter-provincial component, and three quarters of inter-provincial inequ ality was due to its inter-zonal component. Uneven development of town ship and village enterprises has been a major cause of increased regio nal income inequality.