ScholarWorks@중앙대학교

초록

The main objective of this paper is to analyze the implications of Chinese style state capitalism and its effects on the urban income distribution in China. We devide the China's urban sector into the state and private sectors. The state sector is relatively capital abundant and has a comparative advantage in producing the capital-intensive goods. The private sector is relatively labor abundant and has a comparative advantage in producing the labor-intensive goods. According to the Stolper-Samuelson theorem, the ratio of the return to capital and wage in the state and private sectors will be converged and thus urban income inequality in China will also be decreased. However. urban income inequality in China has been widened. We show that increase in the urban income inequality in China is related to rise in capital income in the state sector due to the increases in the relative capital intensity and the return to capital in the state sector. We argue that the Chinese style party-state system emphasizing the capital-intensive state sector resulted in the non-harmonious society.

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