China’s Contribution to Reducing Global Income Inequality

Paolo Mauro (PIIE) and Tomas Hellebrandt (PIIE)
September 21, 2015

Global inequality has fallen since the beginning of the new millennium. The global Gini coefficient declined from 69 in 2003 to 65 in 2013. Rapid growth in emerging economies, notably China, has played a key role in fostering this trend.  During the same period, China’s median individual income grew from US$730 to US$2,200, compared with growth of the worldwide median growth from US$1,090 to US$2,010. Looking forward, projected strong growth in China will enhance welfare for both its citizens and its trading partners, but will no longer be one of the main engines for a direct reduction in global inequality. Nevertheless, global income inequality is projected to decline further in the next two decades: the Gini coefficient for worldwide income distribution in the baseline declines from 65 in 2013 to 61 in 2035.

Figure 1 Individual Income Distribution, 2035

Mauro fig 1

This chart was taken from our latest PIIE Briefing: China’s Economic Transformation: Lessons, Impact, and the Path Forward, in the essay by Tomáš Hellebrandt and Paolo Mauro titled China's Contribution to Reducing Global Income Inequality.

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