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China releases inequality data for first time in years, pegs it just below US

AP Photo / Elizabeth Dalziel
About 13% of China’s population live on $1.25 or less a day.
By Lily Kuo
ChinaPublished Last updated This article is more than 2 years old.

China’s statistics ministry today released—for the first time in years—the country’s Gini coefficient, an indicator of economic inequality: It was 0.474 in 2012, at least officially. That’s an indication the wealth gap is “relatively large,” China’s statistics chief said. The index ranges from 0 to 1, with 0 being the most equal society and 0.4 typically seen as the point when social unrest could become a problem.

The United States had a Gini coefficient of 0.477, the most recent year for which data is available. Given that the Chinese government is widely believed to make up its official statistics, might it have chosen to peg the figure a hair below the US, where the Occupy Wall Street movement has recently drawn attention to inequality?

Chinese bloggers and an economist scoffed at the official figure. Xu Xiaonian, an economist at the China Europe International Business School posted on microblogging site Sina Weibo: ”As for the Gini coefficient–You wouldn’t even find this in children’s tales.” Another blogger wrote, “Whoever believes this data is a fool. Even officials don’t buy these numbers.” Another wrote, “Rubbish! Celestial empire, can you stop deceiving people?” (Bloggers sometimes mockingly call China’s Communist Party the “celestial empire,” a reference to China’s feudal days.)

They have plenty of cause to be skeptical. China has dodged releasing data on inequality since 2005, arguing that the wealthy underreport their incomes too much to make meaningful calculations. According to the newly released Chinese data, China’s inequality gradually eased after peaking at 0.491 in 2008. But, for instance, a university in Chendu estimated that the indicator was at 0.61 in 2010. China says it was 0.481 that year.

Regardless of what the Gini coefficient number really is, Chinese have long recognized the country’s yawning income gap. China is home to 2.7 million millionaires and 251 billionaires, according to the Hurun Institute, many of whom flaunt their wealth. But about 13% of the population lives on $1.25 or less a day, according to United Nations data. 

The sudden release of the inequality figure is likely part of the government’s effort to assuage already present anger over inequality. The Gini number came on the same day that official economic data showed that wages of China’s typically poorer rural workers rose faster than those of urban dwellers last year. Disposable incomes for China’s rural residents increased 10.7% from the year before, compared to 9.6% for urban dwellers, the government said.

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