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State Controlled Industries’ Widening Income Disparity

Xia Yeliang, a professor from Beijing University concluded that the return of “planning” and non-market allocation of resources by the State have been the cause of China’s widening income disparity. Based on his research, the income of the top 10% of the population was 23 times that of the bottom 10% in 2007 compared to 7.3 times back in 1988. As of the end of 2008 monthly pensions of government retirees was 2.1 times that of those in the non-government sector. State controlled industries such as power plants, telecommunications, petroleum, finance, insurance, utilities, and tobacco account for 55% of the total national salaries, but for a meager 8% of the national workforce.

Source: Economic News National Weekly, reprinted by, June 8, 2010