An Explanation Of China’s Income Gap Expansion Based On Neo-cambridge School Theory

China’s income gap between the growing problem of widening income gap between groups. For this phenomenon, economists have put forward their own interpretation of current was recognized four kinds of explanation:based on the interpretation of the Kuznets inverted U hypothesis, based on the interpretation of the theory of dual economic structure, based on human capital theory explanation and interpretation based on China’s particular circumstances. These explanations have a reasonable composition, magnify the income gap in China has a strong explanatory power, but these explanations do not include all the explanations point of view. They paid little attention to the class of power system on income distribution; rarely capture the overall movements in Income gap in China. Therefore, these explanations do not reflect the whole picture of the problem. This paper introduces the Neo-Cambridge School of theory; to fill the academic is not to explain both employers and employees point of view the income gap between the vacancies of the problem.The Neo-Cambridge School of theory from the perspective of both employers and employees to explore the issue of income distribution and income distribution issues at the economic growth analysis is a dynamic theoretical system.With the help of the Neo-Cambridge School of theory, from the perspective of the investment rate, the inflation rate to explain China’s income gap, get conclusions:(Ⅰ) Investment rate factors on the distribution of income gap. It is because of the stubbornly high rate of investment, adding to tilt the distribution of income to the owners of capital, and promote the labor income gap continued to widen.(Ⅱ) Economic growth to some extent affect the distribution of income in each class. In the early stages of economic growth, the need for capital accumulation, will inevitably tilt the distribution of income to the owners of capital situation, we have to face up to the resulting income gap expansion problem.(Ⅲ) Residents’ propensity to save is to affect the allocation of income between workers and capital owners. It is because of China’s increasing propensity to save of workers and capital owners ’propensity to save is getting smaller and smaller, resulting in redistribution of income is not conducive to working-class, eventually leading to the greater of the workers’ income and capitalists income gap.(Ⅳ) Inflation has the effect of income redistribution, but the owners of capital, business and government is beneficial to the labor owner of the working-class is detrimental. China long-term inflation, the resulting redistribution of making China the widening income gap.(Ⅴ) The income gap between the path described by the Neo-Cambridge school of theory in line with the actual situation in China. Improve the social security system, to encourage consumption and to reduce the rate of household savings, lower investment rate, lowering the inflation rate, tax reform is to deal with the inevitable policy choices Income Gap in China.