Public Policy and Long-Term Trends in Inequality in Rural China

Abstract

Abstract This chapter examines long-term changes in rural household incomes, inequality, and poverty in China from the late 1980s to 2013, with a focus on changes in public policy and the structure of rural incomes from 2007 to 2013. Implementation of pro-rural (huinong) policies during the first decade of the 2000s marked a historic shift in public policy, which previously was heavily biased toward the urban areas. Rural income growth accelerated between 2007 and 2013 mainly because of an upsurge of wage earnings, asset income, and imputed rent from owner-occupied housing. The share of agricultural income in total income fell to a historic low. These shifts contributed to the increase in rural income inequality from 2007 to 2013. During this period rural poverty continued to decline. The implementation of pro-rural public policies after 2000 led to small but significant improvements in the redistributive impact of public transfers.