This paper provides a survey of the literature on inequality in China – level, change, causes, and
consequences. It attempts to answer six main questions. How much has inequality risen? What is its
relation to poverty alleviation? What has happened to wealth inequality? What are the main
dimensions of rising income inequality? The dimensions examined are: the rural–urban divide;
urban labor market reform; regional divergence; rural–urban migration; and entrepreneurship,
rent-seeking, and corruption. Was it inevitable that inequality should rise so much? Does it matter
that inequality has risen? Income distribution in China is bound up with both economic reform and
economic growth. This paper concludes by considering the countervailing forces that will determine
the path of inequality in future years.