China’s contemporary paradox: rising inequality, falling support for redistribution

Over four decades of economic reforms, China has experienced a remarkable rise in living standards, alongside a tremendous increase in inequalities. China now has the second-largest number of billionaires globally, with the top 10% owning 68% of the country’s wealth, compared to 70% in the USA. In this context, do Chinese people support redistributing the wealth amassed during these reforms? And what drives their attitudes toward redistribution?

To answer this question, Margot Belguise, Nora Yuqian Chen, Yuchen Huang and Zhexun Mo conducted an online survey experiment with a nationally representative sample of 2,000 Chinese respondents. Half of the respondents were randomly assigned to a treatment group that was shown three vignettes illustrating “reform windfalls”—representative wealth-acquisition stories from the past four decades that did not involve extraordinary ability or effort (e.g., housing arbitrage, housing demolition compensation, and family factory inheritance). The other half served as a control group and were not shown any vignettes.

Key findings:

• Exposure to the vignettes significantly reduces support for redistribution, lowering overall support by nearly 0.1 standard deviation.
• This effect is primarily driven by a reduced perception among respondents that the government has a duty to redistribute wealth from the rich to the poor, followed by a decline in support for policies targeting wealth redistribution from the rich (see Figure below).
• In terms of mechanisms, we find that treated respondents are significantly more likely than the control group to perceive China’s economic reform as redistributive, benefiting both the previously disadvantaged and themselves or their families (see Table below). As a result, the perceived need for formal wealth redistribution diminished.
• The decline in support for redistribution wasn’t linked to changes in how respondents viewed fairness. They did not associate the reform-era wealth scenarios with ability or effort, nor did they consider them distinctly fair or unfair.
• Those facing higher economic pressure—typically educated residents of large cities with lower household incomes—showed an even sharper decline in redistributive support. This group’s reduced support stemmed from unmet expectations, as they were reminded of opportunities they might have missed if China’s marketization and growth momentum had persisted.
• This study offers a cautionary note for the literature on demand for redistribution, and highlights the need for further similar research in other emerging economies, particularly those undergoing or having undergone rapid market liberalization.

AUTHORS

• Margot Belguise, Department of Economics, Warwick University
• Nora Yuqian Chen, Department of Government, Harvard University
• Yuchen Huang, Department of Economics, Sciences Po Paris
• Zhexun Mo, Stone Center on Socio-Economic Inequality, GC-CUNY, World Inequality Lab

MEDIA CONTACT

• Alice Fauvel, Communications Manager, press[at]wid.world