Empirical Research On China’s Urban-Rural Income Gap Based On The Kuznets’s Perspective

With more than thirty years of reform and opening up, Chinese economic construction has made remarkable achievements, overall national strengthen has significantly improved, urban and rural residents’ income level have substantially improved, overall level historically leap from poverty to adequate food and clothing to the well-off, but the income gap between the urban and rural residents is widening. Since1978, urban-rural income gap has been in the fluctuating state, experienced the narrowing—expansion--further reduce-further expansion. Gini coefficient of urban and rural is more than the internationally recognized warning line of0.4. If you consider some of the hidden income, the gap will be larger. Excessive income gap may not only inhibit the enthusiasm of people to produce and healthy economic development, but also may affect the stability and national unity of the social order, and challenge to build the harmonious society and scientific development. Kuznets inverted U theory explains the relationship between income inequality and economic development, to a certain stage of economic development, illustrates the different income disparity trends at different stages of economic development in the industrialization process. I believe that China is in the middle and late industrialization, urban-rural income gap experiences expansion and then narrowing, is now in the left half of the curve close to the inflection point. Because of special national conditions of our country, the reasons of the income gap between urban and rural movements include the Kuznets mentioned, in addition to the market system, the dual structure, the distribution system and distribution policy, Kuznets inverted U theory partly explains this problem. This paper proposes to narrow the income gap between urban and rural from the market system, balance urban and rural development, distribution system and distribution policies.