This paper reviews the recent literature on inequality and income distribution in rural
China utilizing panel datasets. We begin by briefly summarizing and comparing available
panel datasets for rural China that can be employed to explore issues on inequality and income
distribution, and major data issues that might act as obstacles to research and policy
enforcement are then analyzed. The paper then reviews the trend and spatial decompositions
of rural income inequality, its major determinants, and its relationship with household
welfare. Dimensions other than income inequality, such as income mobility and income polarization,
are categorized and reviewed respectively. A recently developed branch of literature
on inequality and health is summarized. On the basis of the review, this paper concludes by
identifying new research areas with existing panel data sets and a new panel dataset that
could shape future research.