The most common data source on income distribution in China is grouped data. When income
data is in grouped form, some acceptable Lorenz model is needed to approximate the
underlying Lorenz curve. This paper presents a new family of Lorenz curves and applies
the main model in our proposed family of Lorenz curves to income data for rural China over the
period 1980 to 2006. We find that the income share of the rural population at the low end of the
income scale has been shrinking, income inequality in rural China has increased over time and
that income inequality has impeded attempts to reduce poverty. However, the welfare of the
rural population is still improving in terms of the generalized Lorenz dominance criterion