Abstract

Shared prosperity has long been a pursuit of the Chinese people. To better understand the current status of income gap in China，a survey was conducted soliciting the relevant information from residents in both urban and rural areas，covering 31 provinces，municipalities and autonomous regions 26，293 survey questionnaires were completed. The analysis indicates that although the Chinese government has taken a leading role in the effort to narrow income gap，this policy has so far been ineffective. The gaps，measured by income inequalities among individuals，between the urban and rural areas，across regions，and among ethnic groups，are as big as they have been，if not larger. The key to narrowing the income gap in China should be the establishment of an unified national market for factors of production with high mobility，particularly the labor market，and political reform. It needs to be pointed out that the Chinese government has not achieved much in these areas，which partially explains the current income gap in China. It is time for China to adopt market-oriented income distribution policies to reduce income inequalities in China.