Emergence of Wealth Inequality in China: Evidence from Rural Household Survey, 1986-2000

Abstract

Based on relatively recent household survey data (1986-2000) in rural China, this paper analyzes the composition and inequality in non-land wealth. We first document the evolution of rural households wealth during the sample period. Our results show that the housing assets have played a dominant role in their wealth composition although the share of the assets tends to decrease during the period. We also observe that financial and fixed assets have become relatively important in their wealth composition. Based on various inequality measures we are able to provide consistent evidence that the inequality of wealth distribution has worsened in rural China. We find that financial asset holdings appear to have significant unequalizing effect on the total non-land wealth distribution, mostly due to the growing differential in rural non-farm opportunities.