Gini Coefficient Overview
Gini coefficient is a common way to measure inequality of income/wealth across a population in a region. The coefficient ranges from 0 to 1, with 0 representing perfect equality and 1 representing perfect inequality. It helps to give an overview on how income/wealth in an economy is distributed.
Insight analysis and Assumptions
China’s Gini coefficient reached a peak at 0.491 in 2008 and then began to decline for the first time since the “Reform and Opening” in 1978. It maintained in a level between 0.46-0.47 since 2009. There are a few factors contributing to the inequality in China. Firstly, the solidification of the lowest and highest income households is more pronounced in recent years based on different socioeconomic means. Secondly, there are structural factors where big income gaps emerged between urban and rural areas, Southeast versus Northeast and a few western regions and different industries. To read other income and wealth topics, please visit related subjects: Income distribution (link), Grey income (link) and Household wealth (link).