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Problems of Income Distribution and Capitalization of Productive Factors--Where is the key of income distribution problems in China?
2015-11-27 09:28:41

Abstract: To observe China’s problems of income distribution from an international perspective, it can be found that China’s income inequality does not show significant difference from the developed countries when it is measured by first distribution (market distribution). The difference between China and the developed countries is that the inequality in developed countries reduced greatly while China’s inequality remains almost the same after redistribution. So, it is not difficult to conclude that the problem of high income inequality in China is mainly contributed to the ineffectiveness of redistribution measure. However, the problems of income distribution in China can’t be explained only by the increasing income difference itself, the problems are more rooted in the unfairness of income distribution, which mainly results from the capitalization of land, natural resources, enterprises or even public goods such as express high way. To solve the problems of income distribution, the priority is to swipe out the unfairness of distribution, and reduce the income inequality by more sophisticated redistribution measures.  

Key words: Income distribution, capitalization of factors, unfairness of distribution, Gini coefficient.

(in Economic Perspectives,No.4,2013)