Appreciation of the renminbi and urban-rural income disparity

Sylviane Guillaumont Jeanneney (1) , Ping Hua (1)

1 CERDI - Centre d'Études et de Recherches sur le Développement International

Although poverty has been significantly decreased in China over the last twenty years, this decrease has been highly unequal across the provinces and has brought increased disparity in urban and rural per capita income. We studied the impact of exchange rate policy on urban-rural per capita income, which was marked by strong real depreciation before 1994 followed by moderate appreciation before stabilizing. We concluded that in the inland provinces where poverty is hardest, real appreciation has attenuated disparity whereas real depreciation had accentuated disparity. This result argues for a revaluation of the renminbi.

Mots clés: income inequality; real exchange rate; China; Urban-rural inequality

Domaines: Economies et finances

Sylviane Guillaumont Jeanneney, Ping Hua. Appreciation of the renminbi and urban-rural income disparity. 2011. ⟨halshs-00556694⟩