Changing regional rural inequality in China 1980-2002

Regional rural inequalities in China since the reform are examined based on Theil's regional inequality index. By using data from the three zones ( east, central and west) and provinces in the period 1980-2002, I find that China's rural regional inequality has an overall increasing trend with a short period of decrease during the entire reform period. However, the trends vary in different indicators and different geographical scales. The trend of income inequality does not always match that of rural economic inequality. The decomposition of Theil's regional inequality further reveals that, since 1987, interregional inequalities between the eastern, central and western regions have been more serious than provincial inequality within the regions themselves. For example, when rural nonagriculture inequality decreased substantially within the east, it increased greatly within the west. Similarly, the income inequality increased within the west and the east but decreased within the central region. China's regional rural inequality remained at a high level and the coastal/interior income differential continued to increase.