The Empirical Research On The Impact Of China’s Urbanization Process To Urban-Rural Income Gap

Common prosperity should be the essential requirements in socialist China. After the reform and opening up China has realized the rapid economic development and the rapid increase of residents’ per capita income. Also, people’s living quality enhances unceasingly. But the problem of Chinese residents’ income gap is also gradually revealed. The income gap is not only a serious impediment to the route of common prosperity of our country, but has a serious influence on the social fairness and justice. In the view of national economy, China’s household income gap problem leads to China’s domestic consumer demand’s decline, and it intensifies China’s overcapacity problem, which affects the healthy development of China’s economy development. In the view of social development, the problem of Chinese residents’ income gap seriously affects China’s social stability and the construction of harmonious society. Therefore, the problem of income gap is impacting Chinese society and national economy. The problem should not be ignored, so it is urgent to narrow China’s residents’income gap.And among the influencing factors of residents’ income gap, the income gap between the residents of urban and rural areas is the largest of all, and more than 60% of China’s national income gap is caused by the income gap between urban and rural areas. So if we want to solve the problems of the national income gap, the problem of urban and rural income gap should be solved first.When mentioned China’s income gap between urban and rural areas, it will be associated with China’s urbanization since the reform and opening up. The urbanization has a strong influence on the income gap between urban and rural areas. What is the urbanization’s effect on the income gap between urban and rural areas? Dose China’s urbanization make any obstacles to narrowing the income gap between urban and rural areas in China?Many scholars have studied this problem. But there still exists some defects and controversy. First of all, the existing research results have not detailedly analyzed the urbanization’s impact on the income gap between urban and rural areas. Secondly, the existing research results failed to combine China’s urban-rural income gap evolution process with China’s urbanization process well. Finally, different scholars have researched this problem with different statistics and measurement methods. And they have drawn different conclusions.In order to supply the gap of the existing achievements, this article has researched China’s urbanization impact on China’s urban-rural income gap with the method of empirical research. In the theoretical part, this article has summarized the Marxist concept of urban and rural, the dual economy theory and Kuznets "inverted U" theory, and concluded that the impact of urbanization on the income gap between urban and rural areas should be the "inverted U". Namely, in the different development stages of the urbanization, urbanization has different influence on the income gap between urban and rural areas. In the early stages of the development of urbanization, the urbanization process makes the income gap between urban and rural areas expand, while in the middle of the development of the urbanization, urbanization makes the income gap between urban and rural areas close. Then, this paper has researched on the transmission mechanism from the urbanization to the income gap between urban and rural areas in detail. In the empirical study part, this article has reviewed the evolution and the actuality of China’s urbanization process and China’s urban-rural income gap change process since the reform and opening up. And the empirical research on the influence of China’s urbanization on the income gap between urban and rural areas of China is made, by using the statistical data from 1978 to 2014. Then the conclusion of the empirical research has been drawn:China’s urbanization of the income gap between urban and rural areas in the line with the "U" curve. And in the year of 2007, China entered the later period of the development of the urbanization, therefore if China continues to develop the urbanization, a condition of decline the China’s income gap between urban and rural areas could be created. So, from the point of long-term trend, China should continue to promote the urbanization process, which can narrow the income gap between urban and rural areas of China. In addition, several typical countries, like America, Japan and South Korea are analyzed for the example that did well in the process of urbanization to narrow the income gap between urban and rural areas. Finally, this paper has drawn the conclusion:China now entered the later period of the development of the urbanization, so continuing to push forward China’s urbanization process will reduce China’s income gap between urban and rural areas. But the increasing of China’s urbanization rate will not lead to a narrowing of the income gap between urban and rural areas in China naturally. On the issue of narrowing the income gap between urban and rural areas of China, the Chinese government should also play an important role. It should take appropriate measures to narrow the income gap between urban and rural areas. At the same time, this article has put forward some feasible policy suggestions on how to reduce China’s income gap between urban and rural areas, like accelerating the process of urbanization of rural migrant workers, advancing the reform of land system, improve the rural human capital investment, strengthening the support for agriculture.