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What does Gini coefficient tell us

(People's Daily Online)

13:34, January 22, 2013

The Gini coefficient, a widely used measure of economic inequality, reached 0.491 in China in 2008, higher than the warning level of 0.4 outlined by the United Nations, and dropped to 0.474 in 2012, according to the National Bureau of Statistics (NBS).

The Gini coefficient, or Gini index, is a figure of zero representing a completely even distribution of wealth, and a figure of one representing all wealth concentrated in one individual's hands.

For the first time, China released the index for the past decade, which demonstrated the government's resolve to bridge the gap between the rich and poor.

In recent years, China has put tremendous efforts narrowing the income gap, including improving social security and health insurance systems, increasing the proportion of profit delivering of state-owned capital and expanding input on people's wellbeing.

However, the issue of income distribution is quite complicated. Improving the income of low-income communities, expanding the medium-income groups and limiting the high earners need to be further improvement in practices.

China should deepen the reform of income distribution system, adjust distribution of national income, reform salary system and make more people benefit from China's development, according to the 18th National Congress of the CPC.

At present, Gini coefficient of developed countries is between 0.24 and 0.36, and that of some economies which were stepped into the middle-income trap is around 0.5. So China should make more efforts to solve the income disparity with positive attitude and prudent policies.

Read the Chinese version: 基尼系数提示了什么(人民时评)
Source: People's Daily; Author: Xu Lifan

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