Abstract

In mid-1950s, Simon Kuznetss paper Economic Growth and Income Inequality was published, which triggered an intense debate that lasted for a long time. Using data from Great Britain, the United States, and Germany Kuznets found that in these countries during the early 20th century income inequality among individuals reduced to some extent. This chapter examines the Kuznets Curve, clarifies the relationship between Chinas economic growth and its income distribution, and elaborates on the characteristics of Chinas income inequality. It provides explanations for increasing income inequalities from multiple angles, examines the impact of economic development, economic transition, and government policy. The chapter summarizes the empirical analysis of the Kunznets hypothesis. It describes the statistical data regarding Chinas economic growth and income distribution changes. It then analyses the relationship between Chinas economic growth and income inequality. It also explains the changes in Chinas income inequality. Keywords: China; economic growth; government policy; income distribution; income inequality; Kuznets hypothesis; Simon Kuznet

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