Short-answer Question #1

China has witnessed a significant rise in income inequality since the early 1980s. While there has been a moderate decline in inequality since 2008, China still faces uneven distributions across several fronts, for example, in completion of tertiary education, gaps in access to certain financial services, and unemployment insurance coverage. Research has been conducted in trying to understand the reasons why China has experienced a large rise in income inequality and have advocated for policy reform to curb this rise.

(a). What changes have been identified as key drivers for the rise in income inequality in China based on empirical evidence?

(b). Based on empirical evidence, do you think inequality may rise further without any policy changes?

(c). Empirical evidence seems to indicate that fiscal polices can have a larger impact and be can more 'inclusive' - stemming from both tax revenues and national spending. Do you think this can be achieved?