The Impact of Government Corruption and Monopolized Industries on Poverty and Income Disparity in Urban China

Abstract

This article examines the impact of government corruption and state monopolized industries on poverty and income disparity in urban China. Urban poverty and income disparity in China have increased sharply in recent years. The gap between the rich and poor has become so alarmingly wide that it has caused riots and violent protests in cities and towns across the country. While most studies on the roots of urban poverty and income disparity in China have focused on factors, such as unemployment, rural‐to‐urban migration, and lack of a social safety net, this study investigates the impact of government corruption and state‐monopolized industries on urban poor and income inequality. This study argues that the root causes of the fast‐growing gap between the rich and poor are the irrationally high income gained through the monopoly of state‐owned industries, the legal gains derived from graft, corruption, and power‐for‐money transactions.