| It is well known that China has made remarkable development achievements since theinitiation of reform and opening-up more than thirty years ago. China has overtaken Japanas the world’s second-largest economy in2010. Its per capita GDP exceeded$5000by theend of2012. However, as China’s economic growth harvested impressive results, therealso emerged the unquestionable problem of widening income gap. In2012, the incomeratio between urban residents and rural residents reached3.10:1. The18th CPC NationalCongress proposed that “we must make every effort to increase individual income, andincrease individual income in step with economic development and work remuneration instep with improvement in labor productivity, and we should raise the share of individualincome in the distribution of national income and increase the share of work remunerationin primary distribution”. All of these suggest the necessity and importance of furtherresearch on the problem of income distribution.Study on the relationship between income distribution and economic growth has beenhot in the economics circle. After review of the theoretical and empirical study on incomedistribution and economic growth, analysis of income gap between urban and ruralresidents in China is conducted in both dynamic and static way. In the part of empiricalstudy, test of the relationship between income gap between urban and rural residents andeconomic growth is performed by means of series analysis and panel analysis. Theconclusion is: While the economic growth represents the Granger reason for rural-urbanincome gap, it is not the same the other way round; Relationship between the urban-ruralresidents income gap and economic growth is also long-standing and stable in the east,central and west regions, but the marginal coefficient of each region is different, whichreflects differences within each region to some extent. Finally, based on the conclusion,corresponding policies are recommended. |
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