Abstract
This working paper is the output from the first phase of a research project dedicated to how developing countries react when opening to trade and foreign direct investment on employment, income distribution, and poverty. The first phase of the research project is based on international cross-section data. An analysis of the Chinese labour market showed new evidence about wages, employment conditions, and within-country income distribution trends focused on geographical and urban/rural income disparities which have led to new policy implications. Some of these recommendations include promoting private business, rural development, and resource mobility, expanding the private sector and role of market forces that allocate capital, and reducing subsidies to capital-intensive undertakings.
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