Household Wealth in China

Abstract:

With new nationwide longitudinal survey data now available from the China Family Panel Studies (CFPS), we study the level, distribution, and composition of household wealth in contemporary China. We found that the wealth Gini coefficient of China was 0.73 in 2012. The richest 1 percent owned more than one-third of the total national household wealth, while the poorest 25 percent owned less than 2 percent. Housing assets, which accounted for over 70 percent, were the largest component of household wealth. Finally, the urban-rural divide and regional disparities played important roles in household wealth distribution, and institutional factors significantly affected household wealth holdings, wealth growth rate, and wealth mobility.

Acknowledgements

The authors are grateful to Siwei Cheng, Cindy Glovinsky, Ping Lu, and Chunni Zhang for their assistance on earlier drafts of the paper.

Notes

The 90/10 ratio is defined as the ratio of household assets at the 90th percentile point to household assets at the 10th percentile point. It is often used to measure the gap between richest and poorest.

According to the 2012 National 1% Population Sampling Survey, the total number of households in China is 429.54 million, and the total number of adults aged 20 or above is 1.042 billion.

The ratio is calculated based on data from Gan et al. (2014).

The Gini coefficient is a well-understood measure of inequality. Based on the distribution of an outcome variable by rank-ordered units in a population, the Gini coefficient measures the degree of inequality in the distribution of total resources. A Gini coefficient of 0 expresses perfect equality, with all units receiving an equal share. A Gini coefficient of 1 means maximal inequality, in which one unit has all the resources.

The reasons that urban families have land assets are (1) some families in urban areas are originally from rural areas (also known as floating population) having their own land assets and (2) some families in newly urbanized areas are engaged in agricultural activities.

In CFPS 2010, assets except housing prices, stocks and funds referred to values in the past year (2009), so adjustment of 2010 used three years of CPIs from 2010 to 2012. For housing prices, stocks and funds, the marked values were asked at the survey time, so only two years of CPIs from 2011 to 2012 were used for adjustment.

Asset items not surveyed in 2010 are government bonds, financial derivatives and other financial products, so we do not include these three items in our comparison. Note that assets from the three items only account for a very small portion of household wealth; thus, our comparison is meaningful despite the values not reflecting true levels.

Additional information

About the Authors

Yu Xie is Otis Dudley Duncan University distinguished professor of Sociology, Statistics, and Public Policy, and research professor at the Institute for Social Research (ISR), University of Michigan and visiting chair professor at Peking University. His main areas of interest are social stratification, demography, statistical methods, Chinese studies, and sociology of science. His recently published works include: Marriage and Cohabitation with Arland Thornton and William Axinn (University of Chicago Press 2007), Statistical Methods for Categorical Data Analysis with Daniel Powers (Emerald 2008, second edition), and Is American Science in Decline? with Alexandra Killewald (Harvard University Press 2012).

Yongai Jin is a PhD candidate in Demography at Renmin University of China and visiting student at Population Studies Center, University of Michigan. Her research interests focus on wealth inequality, fertility, and family demography. Her work (in Chinese) has been published in peer-reviewed journals, including Population Research, Population & Economics, and Population Journal. Her dissertation is on wealth inequality and its determinants in China.