Has the digital economy improved income inequality for ethnic minorities? The case of China

Abstract

This paper examines how China's ethnic minorities' income equality has changed due to the digital economy's development. The study focuses on the critical analysis of the legal system by juridical analysis combined with doctrinal and textual analysis. Furthermore, the article makes the argument convictive by developing econometric models and heterogeneity analysis. Through a dialectical discussion, this paper shows a shared understanding of what the term “digital economy” means in Chinese society, and that income equality for ethnic minorities in the digital economy has both positive and negative effects. On the one hand, the digital economy is conducive to raising income levels and reducing the income gap between Han Chinese and ethnic minorities; however, on the other hand, the digital economy exacerbates the income gap between Han Chinese and ethnic minorities among low-income groups. As a result, disputes over income equality for ethnic minorities in the digital economy are more pronounced among low-income groups. The institutional causes of these problems include the inadequacy of China's digital economy policies for ethnic minorities and the shortcomings of China's legal system for labor protection. The Chinese government should renew the Chinese Constitution, labor law, and employment protection policies to improve the present situation. Based on China's experience, other countries should have pragmatic attitudes to revise the laws and regulations and explore some target measures, such as the digital services tax, to help ethnic minorities.