Village Inequality In Rural Western China

China's rapid economic growth has dramatically reduced the number of poor people over several decades. However, in the past several years, the income inequality has been increased, especillay in rural China. Moreover, pace of poverty reduction has halted. Like many emerging economies such as India, Vietnam and Thailand, increased regional inequality has been a major concern. Especially in the lagging areas where most of poverty population lives, the existence of a large number of absolute poor and rising inequality are a breeding ground for social instability.This snapshot view of inequality within and between rural villages in western China is based on a census-type household survey in three administrative villages and a sampling survey of 286 natural villages in the poor province of Guizhou in 2004. The objective of this paper is to look into what are the sources of within region inequality using the community surveys and a census type of households in Western China.In contrast to coastal regions, agriculture is still the rural people's major source of livelihood in this particular location. Both farm and nonfarm income is distributed unevenly. But it is nonfarm income that accounts for the largest share of overall income inequality. On the expenditure side, health care is one of the most important sources of inequality. Because rural income is strongly related to human capital, the uneven access to health care will translate into a larger income gap in the long run. The analysis based on the natural village survey indicates that income varies widely across villages. Access to infrastructure and markets, education, and political participation explain most of this variation.These findings have important implications on the future development strategy in promoting lagging regions development and poverty reduction. While the overall economic development will be the main instrument to bring the majority poor out of poverty, a targeted approach has become increasingly crucial in helping the poor villages and households. It is critical to understand why these villages and households can not participate in the growth process and how development programs and various transfer programs help them to overcome the constraints they face.The structure of the paper is as the followings, the first section is the introduction, followed by the research objective, data sources and preliminary results in the seond section; the third section describes survey design and sites, and in the fourth section, we examine the patterns of inequality within villages, and apply a regression approach to uncover the major correlates of income in the three villages. The fifth section reports on the pattern and correlates of income distribution across natural and administrative villages. The paper ends with conclusions and policy implications.