Income Distribution Effects Of China’s Economic Growth

After the reform and open policy in1978, China’s economic developed rapidly. Through people’s hardworking among the country, we have made remarkable achievements, and even maintained the level of9%economic growth in2008under the harsh economic environment, and also maintained the growth rate of7.7%in that international situation in2013.China’s economic growth has also created a record in the world, and in2010surpassed Japan to become the world’s second largest economy, what we achieved in economic growth is beyond doubt. But while rapid economic growth, the income gap is growing, the social polarization of wealth gap appeared, and even some poor people hatred of the rich, and even some awful violent accidents happened which affected social stability.In this paper, the study of income distribution affected by economic growth in our country has practical significance. The problem worthy of attention, and we need to put forward some practical and effective measures to solve the problem.In this paper, I analyze the income distribution effects of China’s economic growth by modeling and theoretical analysis, and the data are almost searched or calculated based on China Statistical Yearbook, the National Bureau of Statistics website and Rural China Statistical Yearbook, the indicators used for analysis is mainly per capita GDP, the Gini coefficient. First, it is a question that whether the Kuznets inverted-U curve existed in our country. This article verifies it by using relevant software between national economic growth and income distribution of the country, Based on the results of the regression analysis, I confirm that inverted-U curve does exist, and draw out the corresponding inverted-U curve, and calculate the income level of the corresponding inflection point that stands for. The article also analyzes the income distribution effects of China’s economic growth from the following three aspects, among the eastern central and western areas, between rural and urban, and among industries. What indicators used in the paper is that the GDP growth rate in the eastern central and western areas, the weighted coefficient of variation which is used to describe income gap in the eastern central and western areas. The paper analyzes the relation between GDP growth rates of the East, Middle, West and the weighted coefficients of variation through modeling analysis. The result is that west zone income gap with economic growth showing an increasing trend, while the eastern zone and central zone of income distribution gap is narrowing with its economic growth.The paper takes advantage of the agricultural output value growth rate to stand for the rural economic situation and the Gini coefficient in rural and urban to describe the income distribution situation in each area. The paper takes advantage of the Boston matrix analysis method to analyze the status of the income distribution in different provinces. According to the average annual growth rate of its revenue in accordance with2012revenues levels, the provinces are divided into four areas:Jinniu area, skinny dog area, the problem area, the star area, indicating the status of each region. But the situation in the state will be changed, the situation can become better or worse. Situation between all industries have took place big changes, and the income gap between industries still exist, but data shows that the income gap between the industry has stopped expanding and continued to narrow down. The paper also analyzes distributional effects of economic growth in agriculture, forestry, animal husbandry and fishery, showing that economic growth may improve the situation of the distribution of income while leaving other sectors deteriorated. In this paper, I try to find institutional explanations for this economic phenomenon, which can be conclude mainly to unequal share of resources, pricing, investment-led economic growth mode which lead to inflation.The innovation in this paper is that the data used to verify the existence of inverted-U curve is the most complete and the latest. Since Gini coefficients in the eastern central and western zones is difficult to obtain, weighted coefficient of variation is calculated to analyze of income distribution gap of the three zones. But there are also deficiencies in this article, such as only using the Gini coefficient to evaluate the income distribution state of the country, urban and rural areas, and also only take advantage of the weighted coefficients of variation to analyze the income distribution among the eastern central and western areas. The fact is that many reasons may influent the income distribution, that is to say by using the Gini coefficient and the weighted coefficient of variation is not enough.In this paper, the extensive use of data, although the data are all collected from the China Statistical Yearbook, National Bureau of Statistics website, China Rural Statistical Yearbook and other official data, but the standard of the statistical data itself will change by time, which inevitably affects the outcome.