The Chinese Economy and Income Inequality among East Asian Countries

Using the Atkinson inequality measure of income distribution, we analyze the impact of China as a single country and examine the effect of its domestic income inequality on total income inequality among East Asian countries. First, we find that China's domestic income inequality exacerbated income inequality among East Asian countries from the 1980s, and this effect became even more pronounced from 1990. Second, the growth of China's per capita GDP had an equalizing effect on income distribution in a framework of ASEAN + China, but this effect was reversed around 1997. However, relative to higher income countries such as Japan and South Korea, China's per capita GDP remains low, and although China has contributed to income inequality in the area, it has recently had a more equalizing effect.