Discussion paper

DP12410 Capital Accumulation, Private Property and Rising Inequality in China, 1978-2015

This paper combines national accounts, survey, wealth and fiscal data
(including recently released tax data on high-income taxpayers) in order to provide
consistent series on the accumulation and distribution of income and wealth in China
over the 1978-2015 period. We find that the aggregate national wealth-income ratio
has increased from 350% in 1978 to 700% in 2015. This can be accounted for by a
combination of high saving and investment rates and a gradual rise in relative asset
prices, reflecting changes in the legal system of property. The share of public
property in national wealth has declined from about 70% in 1978 to 30% in 2015,
which is still a lot higher than in rich countries (close to 0% or negative). Next, we
provide sharp upward revision of official inequality estimates. The top 10% income
share rose from 27% to 41% of national income between 1978 and 2015, while the
bottom 50% share dropped from 27% to 15%. China’s inequality levels used to be
close to Nordic countries and are now approaching U.S. levels.


Piketty, T, G Zucman and L Yang (2017), ‘DP12410 Capital Accumulation, Private Property and Rising Inequality in China, 1978-2015‘, CEPR Discussion Paper No. 12410. CEPR Press, Paris & London. https://cepr.org/publications/dp12410