Rising Regional Inequality In China Is A Myth Spawned Of Bad Data

A commonly cited source of tension in China is rising inequality between the few concentrated centres of manufacturing and the rest of the country. The usual data  used to make that point is GDP per capita within regions.

A new post at VoxEu by John Gibson and Chao Li explains that much of that perceived trend is actually down to quirks in Chinese population data.

Chinese population is counted in two ways, by a household registration system known as hukou, and an actual resident count previously conducted every five years. Until recently, the hukou was used to calculate regional GDP per capita.

The number of migrants not included in the hukou count was absolutely enormous. The examples Gibson and Lee provide are Guangdong province, where population was understated by 11 million and GDP per capita was overstated by 15 per cent. Even more extreme is the city of Shenzen, where residents was understated by 6 million by official population data, and GDP per capita overstated by nearly 600 per cent. 

Here’s the author’s map of how GDP was over and understated in 2005, as there is data from both an interdecadal resident count and the hukou during a period of migration: 

chinese regional inequality

Photo: VoxEU

 The actual trend in regional inequality has been a sharp decline since 2005. There was a one year rise in 2005, and a three year trend from 1990-1993, but the overall trend has been downward.

Read the full post at VoxEU

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