No.9 The China in Gini Coefficient

24 Apr

Recently, income gap became a hot topic and got much concerns inChina’s society. Before the economic reform and opening-up,China’s property is concentrated in the hands of the government. There was only a small income gap between urban residents and rural residents as well. Because of the economic reform was started from rural economy, so 1985 became the year which had the smallest income gap between urban residents and rural residents. However, with the development of the reform,China’s cities got huge improvement so that urban-rural income gap was continuing expanding.

The Gini coefficient is a measure of the inequality of a distribution, a value of 0 expressing total equality and a value of 1 maximal inequality. It has found application in the study of inequalities in disciplines as diverse as sociology, economics, health science, ecology, chemistry, engineering and agriculture.

It is commonly used as a measure of inequality of income or wealth. Worldwide, Gini coefficients for income range from approximately 0.23 (Sweden) to 0.70 (Namibia) although not every country has been assessed.

 

(available at:http://en.wikipedia.org/wiki/File:Gini_Coefficient_World_CIA_Report_2009-1.png)

China’s Gini Coefficient has been reached to the international alertness line level. A report released by the Asian Development Bank revealed thatChina’s Gini coefficient – an indicator of the wealth divide – rose from0.407 in1993 to0.473 in2004. If the Gini coefficient is calculated to include unpaid taxes and illegal income, then it rose from 0.47 to0.49 inthose years. However, the international alertness line of Gini Coefficient is 4.0.

In the world today the gap between the rich and the poor becomes wider and wider. Social and economic growth in many developing countries is slow, and one-third of the population in developing countries still lives below the poverty line. Development is uneven in the Asia-Pacific and throughout the world. The gap between the rich and the poor still exists. It is really a serious challenge forChina.

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