The five papers on inequality in China presented in this special issue cover different topics and jointly illustrate key themes in the recent evolution of China’s income distribution.

The opening by Luo, Li, and Sicular (LLS) provides an overview and analysis of the long-term evolution of inequality in China, while the next three papers — on urban wage inequality, public transfers, and top incomes — each illustrates and delves more deeply into important aspects of the broader trends in inequality.

What are the main findings of these papers? The core finding is that inequality in China rose markedly from the 1980s through the early 2000s; only since 2008 has the upward trend stopped or reversed. LLS report and examine the underpinnings of this core finding, while Gustafsson and Wan’s paper (GW) on urban wage inequality sheds further light on the changes in the distribution of wage earnings.

While wages are the most important component of income, it is only part of the inequality story. One important additional question is the role of government taxes and transfers. Since the early 2000s China has embarked on a major effort to put in place a universal social safety net. The paper by Cai and Yue (CY) study the consequences of these efforts.

It has been argued that income inequality measured using household survey data understates actual inequality because surveys have difficulty in capturing top incomes. In the Chinese case, concerns about such bias have increased in the past ten years due to the expansion of private wealth and growing numbers of super-rich. Li, Li, and Wan’s (LLW) paper on top incomes in China attempts to correct for this bias using income information for the Chinese super-rich from various sources.

Finally, Gradín and Wu (GW) analyse the distribution of income and expenditure in China in a telling comparative perspective with India. Both countries represent two extreme cases in the relationship of inequality using both wellbeing indicators.