NBS Issuing China's Gini Coefficient for the Past Decade: A Bit Higher Than the World Bank’s Calculation

Ma Jiantang, Director of China's National Bureau of Statistics (NBS), revealed for the first time China's national Gini Coefficient calculated by NBS in the State Council Information Office on January 18, 2013. From 2003 to 2012, the national Gini Coefficient was between 0.47 and 0.49. It hit the highest point in 2008 at 0.491 and then began to decline.

Ma said the calculation of the national Gini Coefficient is based on the old tenement investigation system, under which urban and rural residents' incomes are separate. What we need to do is to adopt a new nationwide tenement investigation system based on unified statistics from both rural and urban areas. In the past, because tenement investigation was conducted separately for rural and urban areas we had no national statistics on per-capita disposable incomes and thus no comparable indexes. After two years' preparation, NBS has reformed the old tenement investigation system. Since December 1, 2012 the accounts for 400,000 households have been looked at in accordance with a nationwide rural and urban comparable statistical standard and index system. According to this new statistical standard, NBS organized and calculated the basic information of the old households, focusing on their incomes. The calculation was done separately for urban and rural residents. The national Gini Coefficient from 2003 to 2012 was calculated in this way.

From 2003 to 2012, the Gini Coefficients for Chinese residents' incomes are as follows: 0.479, 0.473, 0.485, 0.487, 0.484, 0.491, 0.490, 0.481, 0.477 and 0.474.

After the outbreak of the financial crisis in 2008, governments at various levels in China adopted effective measures to help people with their lives and as a result, the Gini Coefficient dropped from the highest 0.491 in 2008. Ma also provided the Chinese residents' income Gini Coefficient as calculated by the World Bank. The two sets of statistics are very close to each other, but the coefficient offered by NBS is a bit higher than the World Bank's. Ma said the information shows the urgency to accelerate reform in income distribution and narrow income gaps.

As for the media's question "China's civil investigation puts the country's Gini Coefficient for 2012 at 0.61," Ma said standard civil investigations should be important supplements to official statistics. Both instances should be based on a scientific statistical system, a standard sampling method, a proper and moderate sample size and a serious attitude towards the release statistics. He added that statistics in several countries are similar to the development level in China. In 2009, the Gini Coefficient was 0.46 in Argentina, 0.55 in Brazil and 0.40 in Russia. In 2008, the Gini Coefficient for Mexico was 0.48 and that for India in 2005, 0.33. The World Bank's calculation for China's Gini Coefficient in 2008 was 0.474.

Ma said the coefficient of 0.47-0.49 has already reflected a big income gap, urban income being three times that of rural areas. In terms of urban residents' incomes, those in high-income sectors will earn about four times that of low-income counterparts. Anyway, we need to hold a scientific, objective and rational attitude towards the analysis of China's income gap. Only in this way can we produce a scientific and rational reform scheme for income distribution.

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Gini Coefficient was proposed by Italian economist Corrado Gini in 1922, a quantitative measurement for residents' income gap. The coefficient is between 0 and 1. The closer it is to 0, the more equal income distribution is; while the closer it is to 1, the more unequal income is distributed. According to the general international standard, if the coefficient stands above 0.4, the income gap is very large, and when it reaches 0.6, there exists excessive income disparity.


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