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In this paper, we analyse the relationship between China's structural transformation and the inclusiveness of its economic growth. China's economy has undergone significant structural changes since it initiated the economic reforms in 1978. Economic activities have shifted from the low-productivity agricultural sector to the high-productivity industrial sector and, more recently, the tertiary sector, with a large portion of the labour force moving from rural to urban areas, from inland to coastal regions, and from the public to the private sectors. These changes have only been able to happen because of major reforms to the land system, the Hukou system, the ownership of state-owned enterprises, and trade policies. Despite its great success in poverty reduction, China has witnessed rapidly increasing income inequality which only began to decline in the late 2000s. We analyse the political economy that determined the inclusiveness of the structural transformation. As the economy further transitions into services, the tension between structural transformation and its inclusiveness will depend more on the government's ability to reform the current social security policies and pay more attention to disadvantaged groups.

ResumenLa desigualdad de ingresos en las ciudades representa un porcentaje creciente de la desigualdad total en China. Con datos de la encuesta de hogares urbanos de 1995, 2002 y 2007, los autores examinan la influencia en la desigualdad salarial urbana del proceso de privatización empresarial, característica primordial de la transición económica china. La dispersión salarial fue mayor en el sector privado en 1995–2007, pero aumentó más rápido en el público. Sin embargo, más del 50 por ciento del aumento de la desigualdad urbana está asociado a la transferencia de trabajadores del sector público al privado. De continuar esta tendencia, la desigualdad salarial urbana seguirá creciendo.

AbstractUrban income inequality is an increasingly important driver of China's overall income inequality. Using three urban household surveys for 1995, 2002 and 2007, the authors examine how change in enterprise ownership structure – one of the major features of China's economic transition – has contributed to widening urban wage inequality. While wage dispersion was higher in the private sector over the period 1995–2007, it increased faster in the public sector. However, over 50 per cent of the increase in urban wage inequality is associated with labour reallocation from the public to the private sector. Urban wage inequality may thus widen further if more labour is reallocated to the private sector.

RésuméEn Chine, l'impact des inégalités de revenu urbaines sur les inégalités d'ensemble s'accroît. En utilisant des enquêtes auprès des ménages réalisées en 1995, 2002 et 2007, les auteurs analysent l'effet de la réforme du régime de propriété des entreprises – trait marquant de la transition économique chinoise – sur les inégalités salariales des urbains. Ils constatent que, entre 1995 et 2007, la dispersion des salaires est inférieure dans les entreprises d'État, où elle s'accroît plus vite cependant, en raison, pour près de 50 pour cent, d'un transfert de travailleurs vers le secteur privé. Si ce redéploiement se poursuit, les inégalités salariales entre urbains pourraient continuer de se creuser.

This paper analyzes the regional variation of minimum wage in China. We first introduce the institutional background of China's minimum-wage policy and then describe the regional variation of the minimum wages using detailed minimumwage data since the late 1990s. A large regional variation exists in the period studied, and the regional variation has been declining since the late 1990s. Economic factors, including GDP, economic structure, and consumption level, are the main determinants for the large regional variation in the minimum wages. There is evidence suggesting that the regional variation is influenced by political factors, such as competition of local officials.