1033

Income Inequality and Distributive

Justice: A Comparative Analysis of
Mainland China and Hong Kong*
Xiaogang Wu

ABSTRACT Over the past decades income inequality has been sharply
increasing in both mainland China and Hong Kong, two Chinese societies
that have distinct paths of institutional development. While previous studies
on income inequality have attempted to document the trend and investigate
its causes, this article focuses on people’s perceptions of legitimate income
inequality and how these perceptions are related to their attitude towards
inequality. Analyses of data collected in separate population surveys in
China (2005) and Hong Kong (2007) reveal a higher degree of tolerance
of income inequality and a higher degree of perceived fairness of income
distribution in Hong Kong than in the mainland. In both societies, such
normative support for income inequality is positively associated with
people’s perceptions of opportunities.

For if the persons are not equal, they will not have equal share; it is when equals possess or are
allocated unequal shares, or persons not equal equal shares that quarrels and complaints arise.
(Aristotle from Nichomachean Ethics)

Concerning the head of a State or a Family, I have heard the saying: he is not concerned lest his
people should be poor, but only lest what they have should be ill-apportioned. He is not con-
cerned lest they should be few, but only lest they should be divided against one another.
(Confucius from Analects)

Over the past three decades or so, both mainland China and Hong Kong have
experienced dramatic economic growth, accompanied by sharply increasing
income inequality. As a successful model of a socialist transition economy,
China’s economic boom brought about an increase in GDP per capita by 8.8
times from 1978 to 2005, with an annual growth rate of about 9 per cent.1

* This article was presented at the “Social Inequality and Social Mobility in Hong Kong” Conference at
the Chinese University of Hong Kong, 14 March 2008. The author is grateful for financial support from
the Hong Kong Research Grants Council via a Public Policy Research Fund (HKUST6003-PPR20051)
for the data collection in Hong Kong and a Competitive Earmarked Grant (HKUST6424/05H) for his
research on social inequality in China.
1 National Bureau of Statistics, China Statistical Yearbook 2005 (Beijing: China Statistical Publishing
House, 2006).

© The China Quarterly, 2009 doi:10.1017/S0305741009990610

1034 The China Quarterly, 200, December 2009, pp. 1033–1052

A renowned showcase of laissez-faire capitalism, Hong Kong’s economy took off

in the 1970s and was successfully transformed to a regional hub of business ser-
vices in the 1990s, with an annual rate of 5.8 per cent from 1971 to 2001 in the
growth of GDP per capita.2
Despite the fact that the paths of economic development in these two Chinese
societies may not be comparable in many aspects, both have been accompanied
by a rapid increase in income inequality.3 This defies the inverted U-shaped
relationship between economic growth and income distribution observed in
many other countries: that economic development first leads to an increase and
then, beyond a certain point, to a decrease in income inequality.4 The Gini coef-
ficient of household disposable income per capita in China increased from 0.224
in 1985 to 0.449 in 2003.5 In Hong Kong, the Gini coefficient of household
income rose from 0.43 in 1971 to 0.45 in 1981 and further to 0.48 in 1991.
A recent study revealed that Hong Kong’s Gini coefficient was over 0.533 in
2006,6 placing the city among the most income-unequal societies in the world,
alongside the poorest African and Latin American countries.
With reference to past socialist egalitarianism, the sharp increase in income
inequality has caused widespread social discontent that concerns policy makers
in China. Some scholars have warned that high income inequality in China has
far surpassed the threshold that could jeopardize social and political stability
in the country.7 Income inequality in Hong Kong, on the other hand, has always
been maintained at a high level (with Gini coefficients above 0.4 over the past 25
years), and the public’s discontent is not as pronounced as it is in mainland

2 Hong Kong Census & Statistics Department (Hong Kong C&SD), 2001 Census Summary Results,
http://www.censtatd.gov.hk, accessed 20 February 2008; Lui Hon-Kwong, Income Inequality and
Economic Development in Hong Kong (Hong Kong: City University of Hong Kong Press, 1997).
3 Steven C. Chow and Gustav F. Papanek, “Laissez-faire, growth and equity – Hong Kong,” The
Economic Journal, Vol. 91 (1981), pp. 466–85; Milton Friedman, Capitalism and Freedom (Chicago,
IL: University of Chicago Press, 1982); Lui Hon-Kwong, Income Inequality; Azizur Rahman Khan
and Carl Riskin, Inequality and Poverty in China in the Age of Globalization (New York: Oxford
University Press, 2001), and “China’s household income and its distribution, 1995 and 2002,” The
China Quarterly, No. 812 (2005), pp. 356–84; Bjørn A. Gustafsson, Li Shi and Terry Sicular (eds.),
Inequality and Public Policy in China (New York: Cambridge University Press, 2008); Feng Wang,
Boundaries and Categories: Rising Inequality in Post-Socialist Urban China (Stanford, CA: Stanford
University Press, 2008).
4 Simon Kuznets, “Economic growth and income inequality,” American Economic Review, Vol. 45 (1955),
pp. 1–28.
5 United Nations University-World Institute for Development Economics Research (UN-WIDER),
World Income Inequality Database, http://www.wider.unu.edu/research/Database/en_GB/database/,
accessed 10 September 2008. Even in this comprehensive database, a strictly comparable time-series
data on China income Gini coefficients from 1978 to date are not available (see the discussion on
Gini coefficients in the next section) except for Ximing Wu and Jeffrey M. Perloff, “China’s income dis-
tribution, 1985–2001,” Review of Economics and Statistics, Vol. 87 (2005), pp. 763–75.
6 Hong Kong C&SD, 2001 Census Summary Results; Hong Kong C&SD, 2006 Population By-census
Summary Results, http://www.censtatd.gov.hk, accessed 20 February 2008.
7 Jae Ho Chung, Hongyi Lai and Ming Xia “Mounting challenges to governance in China: surveying
collective protestors, religious sects and criminal organizations,” The China Journal, Vol. 56 (2006),
pp.1–31; Josephine Ma, “Wealth gap fueling instability, studies warn,” South China Morning Post,
22 December 2005. Indeed, the Hu Jintao and Wen Jiabao leadership that took command in China
in 2002–03 have announced a number of dramatic policy changes to address the anger and
discontent over increasing inequality.
 Income Inequality and Distributive Justice 1035

China, although income distribution has been used for political mobilization to
press for democracy since 2003 in Hong Kong.8
The contrast between China and Hong Kong in terms of public responses to
increasing income inequality leads to a puzzling question: what amount of
income inequality can be called “large”? In other words, what income gap is con-
sidered to be reasonable and what considered to be problematic? What are the
social and political implications for the rising income inequality? This article
makes a distinction between equality and equity in income distribution and
argues that the perceptions of inequality and distributive justice, which invoke
normative judgements concerning income inequality, are directly linked to public
discontent and political action. Such normative judgements are based on the
dominant cultural values and political ideologies of the society.9 In this sense,
China and Hong Kong provide two interesting cases for comparative studies
because they share the Chinese culture but differ diametrically in ideological
orientation towards inequality: one is associated with egalitarian socialism and
the other with laissez-faire capitalism. Based on survey data collected in China
(2005) and Hong Kong (2007), I examine the people’s tolerance of inequality,
their perceptions of legitimate earnings inequality and opportunities in the two
Chinese societies, and how they differ from each other and from other
countries.10 Such analyses will shed new lights on the social and political conse-
quences of rising income inequality in mainland China and Hong Kong.

Limitations of the Gini Coefficient as a Measure of Income Inequality

Among measures of income inequality, the Gini coefficient has remained the
most popular, at least in part because of its ease of interpretation.11 Many social
commentators in mainland China and Hong Kong have cited the Gini coefficient
to illustrate the growing income disparity seen in recent years, and some
even suggested that the Gini coefficient should be used to monitor social and
political stability: 0.2 or lower – egalitarian, 0.2 ~ 0.3 – relatively egalitarian,

8 To win back public support, Mr Tung Chee-hwa, the former Chief Executive, made poverty alleviation
a key theme in his 2005 annual policy address. The government set up a new Commission on Poverty,
chaired by the Financial Secretary, with inter-generational transfer of poverty at the top of its agenda.
See Henry Tang, “Expectations towards the Commission on Poverty,” speech delivered by the Financial
Secretary, 2 March 2005, http://www.info.gov.hk/gia/general/200503/02/03020298.htm, accessed 20
February 2008; Lee Cheuk-yan, “Testimony on democracy in Hong Kong before the subcommittee
on East Asia and Pacific Affairs of the United States Senate Committee on Foreign Relations,” 4
March 2004, http://foreign.senate.gov/testimony/2004/Cheuk-yanTestimony040304.pdf.
9 Bernd Wegener, “Political culture and post-communist transition – a social justice approach: introduc-
tion,” Social Justice Research, Vol. 13 (2000), pp. 75–82; Martin K. Whyte and Maocan Guo, “How
angry are Chinese citizens about current inequalities? Evidence from a national survey,” forthcoming,
Social Transformation in Chinese Societies, Vol. 3.
10 For a similar kind of comparison, see Bernd Wegener and Stefan Liebig, “Is the ‘inner wall’ here to stay?
Justice ideologies in unified Germany,” Social Justice Research, Vol. 12 (2000), pp. 177–97.
11 Paul Allison, “Measure of inequality,” American Sociological Review, Vol. 43 (1978), pp. 865–80; Tim
Futing Liao, “Measuring and analyzing class inequality with the Gini Index informed by model-based
clustering,” Sociological Methodology, Vol. 36 (2006), pp. 201–24.
1036 The China Quarterly, 200, December 2009, pp. 1033–1052

0.3 ~ 0.4 – reasonable, 0.4 ~ 0.5 – alerting and above 0.5 – dangerous. According
to this criterion, China’s income inequality is approaching the dangerous zone.12
However, the Gini coefficient has many limitations in comparing income
inequality across countries and over time. First, it can be calculated at different
levels, such as household, household per capita or individual person, on which
data are not always consistently available. In general, if non-working spouses,
children and retirees in the household are included in the calculation, the Gini
coefficient for household income is greater than that for household income per
capita, which is greater than that for individuals’ work income.
Secondly, measures of income inequality vary under different definitions of
income. For example, in a comprehensive database on cross-country income
inequality constructed by the World Institute for Development Economics
Research of the United Nations University, Gini coefficients in China are calcu-
lated based on household gross income, or disposable income per capita, or
expenditure or consumption per capita from different data sources,13 and there
is no consistent measure for the country over the period of economic reform
from 1978 to 2005 (also see footnote 5). Comparing the coefficients across
nations can also be problematic because the measure of income inequality may
be subject to the influence of income taxes, the efficiency of income use, welfare
benefits, life quality and purchasing power. Even within China, a great difference
in cost of living exists between urban and rural areas.
Finally, even if the coefficients are consistently measured at the household level
over time, a temporal trend in increasing inequality may reflect a change in
family structure, such as household size, the number of working household mem-
bers, the age distribution of household members, their health conditions and edu-
cation attainments, and so on. For example, an upsurge in the number of elderly
households in Hong Kong has led to a rapid rise in the number of low-income
families and thereby to the increase in income inequality. In response to criticism
citing the high Gini coefficient, the Census and Statistics Department published a
thematic report on household income distribution in Hong Kong, pointing out
the difficulties encountered in analysing and comparing Gini coefficients.
According to the report, after adjustments for taxes and social transfers, the
Gini coefficient is reduced from 0.533 to 0.475, and the trend towards increasing
inequality has remained largely stable over the past ten years.14
Based on solid statistical data analysis, this thematic report has received neither
much criticism nor much attention by the public in Hong Kong. In contrast, a
remark on the limitation of using Gini coefficients to measure income
inequality by Professor Li Yining 厉以宁, a well-known liberal economist,
encountered harsh condemnation by the Chinese public via the internet.

12 Francesco Sisci, “Is China headed for a social ‘red alert’?” Asia Times, 20 October 2005; Ma, “Wealth
gap fueling instability.”
13 UN-WIDER, World Income Inequality Database.
14 Hong Kong C&SD, Thematic Report: Household Income Distribution in Hong Kong, 2007, p.111, http://
www.censtatd.gov.hk, accessed 1 March 2008.
 Income Inequality and Distributive Justice 1037

According to Li,15 because of the dual social structure in China, under which
rural and urban residents differ greatly in income sources, living standards, con-
sumption behaviours and lifestyles, a single Gini coefficient may have overstated
the degree of inequality; had it instead been computed for rural and urban areas
separately, both Gini coefficients would be between 0.32 and 0.35, which fall
within a reasonable zone. Hence, the gap between rich and poor and the trends
towards social polarization may not be as serious as suggested by the single Gini
coefficient.
Li may be right to some degree, for reasons similar to those laid out in the the-
matic report by the Hong Kong Census and Statistics Department, and especially
in terms of the social and political implications of the increasing income inequal-
ity. A Chinese farmer in rural Guizhou province could never imagine the life of a
senior-level professional working for a multi-national firm in Shanghai. In this
sense, pooling their statistics to compute an inequality index makes little sense,
particularly in terms of how those who lag behind would respond to the income
disparities. Indeed, analysis shows that it is not the most disadvantaged people
such as peasants who are most angry about current patterns of inequality in
China.16
Therefore, while the Gini coefficient provides a very powerful tool for monitor-
ing temporal trends in the income inequality in a country and for comparing
income distributions across countries as long as the measures are consistent, it
has two major limitations. On the one hand, it can be manipulated both by
left-wing analysts seeking to decry extreme inequalities and by right-wing pundits
wishing to demonstrate that inequality is not a serious issue. On the other hand,
the objective calculations of the Gini coefficient, or any other measures of
inequality, no matter how sophisticated, involve no normative judgement of
how large the income gap in a country should be.17

Chinese Exceptionalism? Rhetoric on Equity and Equality

in Income Distribution
Parties involved in the policy debate about rising income inequality have rarely
made an explicit distinction between equality ( pingdeng 平等) and equity (gong-
ping 公平). Equality is a measure indicating what the distribution of income actu-
ally is, whereas equity is an ethical judgement on what the distribution of income
should be. If everyone receives an equal share regardless of their contribution and
performance, equality is achieved but equity is not for those who worked
harder.18 From a functionalist perspective, inequality and stratification in

15 Li Yining, “Li Yining on the issue of reducing income gap,” Guangming Daily, 7 January 2002.
16 Whyte and Guo, “How angry are Chinese citizens.”
17 Ibid.; Martin Kreidl, “Perceptions of poverty and wealth in Western and post-communist countries,”
Social Justice Research, Vol. 13 (2000), pp. 151–76; Wegener, “Political culture and post-communist
transition.”
18 Aristotle, Nicomachean Ethics, trans. W.D. Ross (Oxford: Clarendon Press, 1995 [1908]).
1038 The China Quarterly, 200, December 2009, pp. 1033–1052

resource distribution are necessary in any modern society,19 but such differen-
tiation must be legitimate according to the dominant values of the society; that
is, those who get more must deserve more, and those who get less also must
deserve less.
For a long time Chinese people were said to favour egalitarianism ( pingjun
zhuyi 平均主义), which is often linked both to the long Chinese cultural tradition
and to the short socialist past in the mainland. As Confucius articulated in his
Analects, “he is not concerned lest his people should be poor, but only lest
what they have should be ill-apportioned” (bu huan gua er huan bujun 不患寡
而患不均).20 Such egalitarian mentality was further enhanced by the income dis-
tribution policy during the socialist era since the 1950s. Hence, to improve effi-
ciency and boost productivity, economic reforms in the late 1970s emphasized
breaking the “iron rice bowl” (tie fanwan 铁饭碗) and enlarging the income
gap. The policy, articulated as “efficiency as priority and equity as supplement”
(xiaolu youxian, jiangu gongping 效率优先, 兼顾公平), has essentially ignored the
equity issue in income distribution for almost two decades. To address the shar-
ply rising income inequality, recent policies have been shifted to “paying more
attention to equity” (gengjia zhuzhong gongping 更加注重公平) under the rubric
of “a harmonious society” (hexie shehui 和谐社会), which, in President Hu
Jintao’s 胡锦涛 words, “should feature democracy, the rule of law, equity, justice,
sincerity, amity and vitality. … All the people can work to their fullest abilities,
be paid according to their hard work and get on well with each other.”21
In spite of this policy shift, liberal economists continue to dismiss the usage of
Gini coefficients and insist that the current income disparities should not be a
great concern.22 Those who express serious concerns about increasing income
inequality are often labelled as “resenting the rich” (choufu xintai 仇富心态) or
having the “red eyes” disease (hongyan bing 红眼病), a Chinese colloquial term
for jealousy. In Hong Kong, such rhetoric is rarely heard, but it was recently
aroused when a local business tycoon made the controversial comment that
“Hong Kong is the most communist place in China.”23
The implicit assumption of the rhetoric is that equality (or egalitarianism) is
desired among those who complain about high income inequality. On the
other hand, Chinese people seem to tolerate high inequality and believe in indi-
vidual effort and merit-based disparities, partially because the tradition of the
imperial examination system provided a channel for social mobility.24 This is

19 Kingsley Davis and Wilbur E. Moore, “Some principles of stratification,” American Sociological
Review, Vol. 10 (1945), pp. 242–49.
20 Arthur Waley, The Analects of Confucius (London & New York: Routledge, 1995[1938]).
21 Hu Jintao, “Speech in the Fourth Plenary Session of the 16th Central Committee,” 19 September 2004,
http://www.xinhuanet.com/newscenter/zht0919/xgzl.htm, accessed 20 February 2008.
22 Li Yining, “Reducing income gap”; Zhang Weiying, “Market reform and income distribution,” http://
www.chinahrd.net/zhi_sk/jt_page.asp?articleid=138311, accessed 19 February 2008.
23 Chaim Estulin, “Hong Kong’s new culture,” The Times, 17 January 2005.
24 Ping-Ti Ho, The Ladder of Success in Imperial China (New York: Columbia University Press, 1967);
Whyte and Guo, “How angry are Chinese citizens.”
 Income Inequality and Distributive Justice 1039

consistent with some liberal economists’ suggestion that education is an impor-

tant way to reduce inequality. As long as “equality in opportunities” ( jihui ping-
deng 机会平等) is achieved, inequality in socioeconomic outcome, regardless of
how large it is, would not be a problem.25 If equality in educational opportunities
can be achieved, would inequality based on education be considered acceptable?
This question touches upon the fundamental value of a society, namely, what is
considered to be fair (equitable).26 The objective calculation of the Gini coeffi-
cient, or of any other sophisticated measures of inequality, cannot be a substitute
for the normative judgement of inequality.
In my view, much of the public debate and the government’s concerns are
related to the issue of equity. Over the past few decades, empirical research on
the origins and development of people’s norms about the distribution of income
has flourished in Western sociology.27 This article contributes to the literature by
providing an empirical investigation of Chinese people’s perceptions of inequality
and distributive justice. Based on survey data collected in China and Hong Kong,
I attempt to answer the following questions: first, do Chinese people tolerate a
high degree of inequality or do they favour egalitarianism; second, how do
Chinese people in China and Hong Kong differ in their perceptions of pay equity
(distributive justice); and finally, how is the perception of distributive justice
associated with the perception of opportunities?

Data, Variables and Measures

I analyse data from the China General Social Survey (2005) and the Survey on
Social Inequality and Mobility in Hong Kong (2007). The Chinese General
Social Survey is an annual survey of a national representative sample of the
adult population aged 18 or above in both rural and urban China (except for
Tibet). It uses a multi-stage stratified random sampling method. First, 125 prin-
cipal sampling units are selected from 2,798 county or county-level districts, stra-
tified by region, rural and urban populations, and education levels, then four

25 Jianhui Liu, “Equity is a must but equality is not,” 2005, http://en.ce.cn/Insight/200511/30/

t20051130_5362706.shtml, accessed 20 February 2008.
26 For example, analyses show that Chinese people tend to tolerate merit-based inequalities. In the 2003
Chinese General Social Survey, respondents were asked “who should get a higher income?” 64% of
respondents said “professionals and highly educated,” 13.7% said “workers” and 12.8 % said “state
cadres or managers in state or collective owned enterprises” should earn more. Chinese people stress
much more than many other societies that merit-based attributes are the main reasons why some people
are poor while others are rich. See Yanjie Bian, Chinese General Social Survey 2003: Technical Report
and Users’ Manual (Hong Kong: HKUST Survey Research Center, 2005); Whyte and Guo, “How
angry are Chinese citizens.”
27 Duane F. Alwin, “Distributive justice and satisfaction with material well-being,” American Sociological
Review, Vol. 52 (1987), pp. 83–95; Guillermina Jasso, “A new theory of distributive justice,” American
Sociological Review, Vol. 45 (1980), pp. 3–32, and “How much injustice is there in the world? Two new
justice indexes,” American Sociological Review, Vol. 64 (1999), pp. 133–68; Jonathan Kelly and M.D.R.
Evans, “The legitimation of inequality: occupational earnings in nine nations,” American Journal of
Sociology, Vol. 99 (1993), pp. 75–125; Jonathan Kelley and Krzysztof Zagorski, “Economic change
and the legitimation of inequality: the transition from socialism to the free market in Central-East
Europe,” Research in Social Stratification and Mobility, Vol. 22 (2005), pp. 231–366.
1040 The China Quarterly, 200, December 2009, pp. 1033–1052

second-level sampling units are selected in each principal unit, two third-level
sampling units are selected in each second-level unit, and finally, ten households
are selected in each selected third-level unit. One eligible person aged 18 or above
is randomly selected from each sampled household to serve as the survey respon-
dent. In all, 10,372 completed interviews are included in the sample, 6,098 from
urban areas and 4,274 from rural areas. Because urban residents are over-
sampled to yield enough cases for examination of variations within cities, we
use sampling weights to correct for this over-sampling to compute figures repre-
sentative of the general population in China.28 In this article, I restrict the sample
to those aged between 18 and 60, giving a total of 8,696 individuals.
The Hong Kong survey is a large-scale, city-wide representative probability
survey on social stratification and mobility among the adult population aged
between 18 and 60. A two-stage stratified replicated sampling design is adopted
for the survey. In the first stage, a random sample of addresses (or all households
in the addresses sampled) is selected, with the type of housing and residential dis-
trict as the stratification factor. This arrangement ensures that respondents living
in different types of housing and different districts are sampled. In the second
stage, a person aged between 18 and 60 in the sampled households is randomly
selected and interviewed using the last birthday method. In all, 4013 interviews
are included in the sample. To make the data representative of the general popu-
lation, a weight is created based on the official statistics in terms of sex, age, edu-
cation and household size from the 2006 Hong Kong population by-census
data.29 The descriptive statistics of the demographic characteristics for the
samples are presented in Appendix A.
Both the China and Hong Kong surveys include some comparable questions
on the subject’s attitude towards income inequality and fair pay. First, respon-
dents were asked about the perceived boundaries of “poor” and “rich.”30 The
ratio can be used to measure people’s tolerance of income inequality.
Secondly, to make distinction between the empirical estimation of income
inequality and ethical evaluations that people may have about their perceptions,
respondents were asked to estimate how much people in particular occupations

28 While the official technical report of “the China General Social Survey 2005” has not yet been released,
the research designs and implementation are similar to those in CGSS 2003. See Yanjie Bian, China’s
General Social Surveys 2003. The response rate in CGSS 2005 is 53%. In China, as elsewhere, very
rich people are less likely to participate in surveys. However, given its tiny size, the under-representation
of this group will not have a substantial impact on the national averages of tolerance of income inequal-
ity (also see the discussion on a similar issue Khan and Riskin, “China’s household income,” n. 3).
29 Hong Kong Census and Statistics Department, 2006 Population by-Census Summary Results; Xiaogang
Wu, Hong Kong Social Stratification and Mobility Survey: Technical Report and Users’ Manual (Hong
Kong: HKUST Survey Research Center, 2008).
30 In the Chinese survey, respondents were asked: “According to the local living standards, in your
opinion, a household with 3–4 members can be considered ‘poor’ if the average monthly income is
below _____ and ‘rich’ if the average monthly income is _____ or above.” In the Hong Kong survey,
respondents were asked: “According to recent statistics, the household median income was HK
$17,100 in Hong Kong in 2006 (with a household size of 3). In your opinion, what average monthly
household income would mean that the household was ‘poor’? What average monthly household
income would mean that the household was ‘rich’?”
 Income Inequality and Distributive Justice 1041

actually earn per month (“do earn”) and how much they should earn (“should
earn”). In contrast to the large literature that has analysed statistical data to
measure objective trends in income inequality, these questions capture people’s
perceptions and enable researchers to examine the issues more relevant to individ-
uals’ normative evaluations of income inequality. If the “do earn” and “should
earn” are approximately equal, the income distribution can be construed as
“fair.” By this measure, inequality and equity are empirically differentiable.
Finally, respondents were asked to answer a set of questions on their attitude
towards inequality and perceptions of opportunities on a five-point scale (1 –
strongly agree, 2 – agree, 3 – neutral, 4 – disagree, 5 – strongly disagree).
These questions are linked to individuals’ normative evaluations of income
inequality in these two societies to account for why Chinese people have a
high acceptance of inequality.

Results
Perceived boundaries of “poor” and “rich”
As mentioned above, respondents in both China and Hong Kong were asked
about what average household income per month would be considered “poor”
and what would be considered “rich.” Table 1 presents the mean monthly income
considered as “poor” and “rich” in China and Hong Kong as a preliminary analy-
sis of the difference in perception of inequality between the two Chinese societies.
As the results show, on average, respondents in China believe that a household
monthly income below 633 yuan can be considered “poor” and a monthly
income above 4,575 yuan can be considered “rich.” In Hong Kong, people
believe that a household monthly income of HK$6,299 and below can be con-
sidered “poor” and a monthly income of HK$102,888 can be considered
“rich.” The larger standard deviation of the second perceived figure suggests
that there is much less consensus on what can be called “rich” than what can
be called “poor” in both societies.
In the last column, I compute the rich-to-poor ratio, which indicates people’s
degree of tolerance of income inequality. In other words, as long as the household

Table 1: Perceived Boundary for “Poor” and “Rich” in China and Hong Kong
Monthly household Monthly household income Rich/poor
income below which is above which is considered ratio
considered “poor” “rich” (standard errors) (standard
(standard errors) errors)
China (yuan) 633 (602) 4,575 (8,885) 9.9 (19.4)
Hong Kong (HK$) 6,229 (1,768) 102,888 (110,542) 17.1 (18.1)
Notes:
Data are weighted.
Sources:
China General Social Survey (2005); Hong Kong Social Inequality and Mobility Survey (2007).
1042 The China Quarterly, 200, December 2009, pp. 1033–1052

monthly income falls within the range, it is considered to be in the middle.

A higher ratio indicates more tolerance of inequality. Results show that the
ratio is 9.9 in the mainland and 17.1 in Hong Kong. As expected, the huge dis-
crepancy suggests that people in the mainland are much less tolerant of income
inequality than are people in Hong Kong, even though inequality measured by
Gini coefficients is lower in China than in Hong Kong.

Actual and ethical inequality

In the China survey, respondents were asked to estimate the actual (“do earn”)
and ethical (“should earn”) earnings of six occupations: farmers, peasant-
workers, factory workers, professors, senior government officials (at provincial/
ministerial levels) and executives in large state-owned enterprises. Lawyers and
doctors were not included because these private-practice professionals are rarely
visible to most Chinese people. In Hong Kong, eight occupations were included
in this exercise: cleaners, factory workers, office clerks, lawyers, corporate execu-
tives, professors, doctors and senior government officials.
A key advantage of using the “do earn/should earn” questions is that many
confounding factors can be held constant at the respondent level; that is, attitudes
about what specific occupations “should earn” can be conditioned on what the
individual believes they “do earn” so that individual errors in estimating actual
earnings are directly controlled.31 Moreover, these questions are clearly restricted
to differences in the earnings of specific occupations thus avoiding complex
issues such as household size, income sources, tax rates or welfare transfers.
Indeed, these questions have also been used by International Social Survey
Programmes elsewhere, thus enabling us to compare perceptions of distributive
justice in China and Hong Kong with those in many other countries.32
Table 2 presents the average monthly earnings of what respondents think that
people “do earn” and “should earn” for the selected occupations in the mainland
and Hong Kong. For example, Chinese farmers are estimated to earn 459 yuan
per month and peasant workers 781 yuan per month. On the other hand, senior
government officials at provincial/ministerial levels are estimated to earn 5,894
yuan a month and CEOs in large companies about 25,885 yuan a month.
Even without the actual monthly earnings for these occupations, these figures
make sense and are not far from reality. The highest paid occupation (CEO in
large companies) earns 56.4 times more than the lowest paid (farmer).
In the Hong Kong survey, the respondents estimate that cleaners earn about
HK$4,796 per month and factory workers about HK$6,258, while doctors in pri-
vate practice earn HK$77,949 per month and senior government officials HK

31 Lars Osberg and Timothy Smeeding, “‘Fair inequality’: attitudes towards pay differentials: the United
States in comparative perspective,” American Sociological Review, Vol. 71 (2006), pp. 450–73.
32 Kelley and Zagorski, “Economic change and the legitimation of inequality.”
 Income Inequality and Distributive Justice 1043

Table 2: Perceived Monthly Income Measured as “Do Earn” and “Should Earn”
for Selected Occupations in China and Hong Kong
A: Do earn B: Should earn C: Ratio: A/B
China
1. Farmer 459 778 0.59
2. Peasant worker 781 1,082 0.72
3. Urban factory worker 966 1,317 0.73
4. Professor 4,285 4,514 0.95
5. Senior government official 5,894 4,361 1.35
6. CEO in large company 25,885 22,894 1.13
Ratio: highest/lowest 56.4 29.4 –
Hong Kong
1. Cleaner 4,796 6,310 0.76
2. Factory worker 6,258 7,472 0.84
3. Office clerk 7,650 8,915 0.86
4. Lawyer 53,958 57,606 0.94
5. Corporate executive 54,130 62,170 0.87
6. Professor 75,383 76,754 0.98
7. Doctor in private practice 77,949 81,171 0.96
8. Senior government official 155,140 145,203 1.07
Ratio: highest/lowest 32.3 23.1 –
Notes:
Data are weighted.
Sources:
China General Social Survey (2005); Hong Kong Social Inequality and Mobility Survey (2007).

$155,140. The highest paid occupation (senior government officials) earns 32.3
times as much as the lowest paid (cleaners). These figures are not objective but
subjective assessments of actual pay. While the Gini coefficient indicates that
earnings are distributed more unequally in Hong Kong than in China among
the working population, mainland people tend to perceive higher income inequal-
ity than do people in Hong Kong.
Respondents were also asked how much people in these specific occupations
should earn. The means of these “ethical” monthly earnings for these occupations
are presented in Column B. Comparing Columns B and A suggests that in both
China and Hong Kong, people generally believe that income inequality is very
large and they favour less inequality, as expressed by higher “should earn” salaries
for low-paid occupations and lower “should earn” salaries for high-paid occu-
pations. Nevertheless, there is no evidence that people prefer absolute egalitarian-
ism and want all occupations to be paid equally. In China, a gap of 29.4 times is
considered acceptable, while a gap of 23.1 times is acceptable in Hong Kong.
One can also compare the “do earn” with “should earn” for each occupation and
compute the ratio of Column A to Column B. An occupation is fairly paid if the
ratio is close to 1, over-paid if the ratio is greater than 1 and underpaid if the
ratio is less than 1. In China, people believe that, on the one hand, farmers are
underpaid by 41 per cent ([1-0.59]*100), peasant workers are underpaid by 28
per cent and urban factory workers are underpaid by 27 per cent; on the other
1044 The China Quarterly, 200, December 2009, pp. 1033–1052

hand, managers and executives in large companies (most owned by the state) and
senior government officials are overpaid, by 13 per cent and 35 per cent, respect-
ively. This suggests that higher earnings for these two occupations, which are associ-
ated with public power and public assets, are considered less legitimate in China.
In Hong Kong, the sentiment about equitable pay is different. People believe
that professionals like lawyers, doctors and professors are fairly paid (“do earn/
should earn” ratios range from 0.94 to 0.98). However, they believe that cleaners
are underpaid by 24 per cent and factory workers by 16 per cent. The only occu-
pation that is considered overpaid is senior government officials, but the overpaid
rate is only 7 per cent. This probably reflects the public’s discontent with govern-
ment policy on curbing income inequality. Interestingly, corporate executives are
believed to be underpaid by 13 per cent. This may be because company size is
not specified. A clear message from the ratio of “do earn” to “should earn” is
that there is little egalitarian sentiment in Hong Kong. People’s main concern
about inequality is that the “poor” are too poor and thus need to be helped, but
the “rich” are not said to be too rich. Perception of income inequality has therefore
caused more widespread social discontent in mainland China than in Hong Kong.
One may argue that the “do earn/should earn” approach can give a misleading
outcome if the perceptions of respondents on payment for their own occupation
are taken into account, because few people will think that their jobs are overpaid.
However, previous studies of occupational prestige show a consensus in rating
occupational status, rather than respondents over-rating their own occupation.33
This may also be applicable to occupational earnings. Appendix B presents the
average monthly earnings of what respondents think that “people do earn”
and what “people should earn” for selected occupations, excluding respondents’
own occupations.34 Results remain largely the same.

Pay equity: an international comparison

To place the results in a broader international context, I use the Gini coefficient
to summarize each respondent’s assessment of earnings inequality. Specifically, I
calculate the Gini coefficients of estimates of actual earnings (“do earn” income)
and ethical earnings (“should earn” income) among the listed occupations for
each person. The ratio between the second Gini coefficient and the first indicates
how much respondents’ own estimate of the actual degree of inequality in pay
among a range of occupations diverges from their own ethical inequality. This
ratio is called the “fairness index.”
Table 3 presents the means of the two Gini coefficients and the fairness index
in China and Hong Kong. Because the International Social Survey Programmes

33 Donald J. Treiman, Occupational Prestige in Comparative Perspective (New York: Academic Press,
1977); Vered Kraus, E. O. Schild and Robert Hodge, “Occupational prestige in the collective con-
science,” Social Forces, Vol. 56 (1978), pp. 900–18.
34 The selected occupational categories cannot be matched exactly to respondents’ own occupations.
In many cases, approximately similar occupations are used in this exercise.
 Income Inequality and Distributive Justice 1045

Table 3: Perceived Actual and Ethical Inequality: Cross-Country Comparison

Countries GiniA: average Gini GiniE: average Gini Average ratio
index of salaries index of salaries people of GiniE/GiniA
people “do earn” “should earn”
China (2005) .44 .38 .86
Hong Kong (2007) .47 .44 .94
Russia .66 .39 .61
Chile .60 .47 .79
Poland .58 .44 .77
Latvia .58 .41 .70
Hungary .56 .37 .67
Czech Republic .53 .39 .76
France .52 .38 .74
Philippines .49 .46 .97
Great Britain .49 .36 .73
Slovenia .47 .34 .74
Japan .46 .37 .81
Israel .45 .36 .80
Canada .45 .33 .76
Portugal .45 .33 .73
United States .43 .35 .82
New Zealand .43 .32 .76
Germany East .43 .32 .74
North Ireland .42 .32 .76
Australia .42 .31 .74
Bulgaria .42 .28 .68
Germany West .41 .34 .82
Austria .41 .32 .78
Cyprus .40 .33 .82
Sweden .35 .22 .65
Spain .34 .22 .65
Norway .30 .21 .73
Slovakia .25 .19 .82
Average of all .46 .34 .76
Notes:
Figures for other countries are calculated based on the data from the International Social Survey Programme, 1999 (see Lars Osberg
and Timothy Smeeding, “‘Fair inequality’: attitudes towards pay differentials: the United States in comparative perspective,” American
Sociological Review, Vol. 71 (2006), pp. 450–73, Table 3).

collected similar information in many other countries in 1999, I also include com-
parable figures from 27 countries varying by region, size, development level, insti-
tutional legacy and culture.35
Results show that the Gini coefficient of the “do earn” income is 0.44 in China
and 0.47 in Hong Kong. It should be noted that respondents’ average estimates of
the Gini coefficient are not estimates of income inequality in the labour market as
a whole, because the occupations included in the surveys are only a small subset

35 Despite the fact that the list of occupations in China and Hong Kong is not identical to the list in ISSP, it
is modified based on the ISSP questions and covers the major occupations. The comparisons of the “do
earn” and “should earn” Gini index are informative.
1046 The China Quarterly, 200, December 2009, pp. 1033–1052

of all occupations.36 There is a discrepancy between the actual Gini coefficient

and the estimated Gini coefficient in some other countries, particularly post-
socialist countries. In Russia, for instance, whereas the actual Gini coefficient
is 0.31,37 the Gini coefficient estimated by Russian respondents is 0.66. The senti-
ment captured in the divergence between actual and estimated income inequality
may have important social and political consequences.
The second column shows that the Gini coefficient for the “should earn”
income is 0.38 for China and 0.44 for Hong Kong. This difference suggests
that people in the mainland tolerate less income inequality than people in
Hong Kong, a finding consistent with the results in Table 1. However, according
to the international standard (an average of 0.34), the perception of ethical
(“should earn”) earnings inequality is high in both Chinese societies. Chinese
people are therefore not particularly prone to egalitarian distribution of income.
Because people’s perceptions of fair pay may be conditioned on how much
inequality they think there is, the third column of Table 3 presents the ratio of
the two Gini coefficients, which captures the acceptable perceived income
inequality (fairness index). If the index equals 1, it means that the respondent
considers the existing income inequality “fair”; the lower the index, the more
unfair the respondent feels the existing income distribution is.
Again, respondents in both China and Hong Kong have high acceptance of the
existing income inequality: the ratios are 0.86 and 0.94, respectively, whereas
the average ratio for the other 26 countries is 0.76. Indeed, Hong Kong is ranked
the second highest after the Philippines, and China is ranked the third highest.
While determining if these figures are strictly comparable may require further
investigation, the remarkable differences observed across countries suggest that
respondents in both China and Hong Kong are more likely to think that income
inequality is fair than are respondents in other countries, even though actual
inequality has been very high in both societies.
For Hong Kong, the unusually high rate of acceptance of income inequality
can be linked to the laissez-faire capitalism adopted since the colonial era. For
a long time, Hong Kong has been considered as a land of opportunity where indi-
vidual efforts and hard work will allow people to get ahead. This view has been
constantly enhanced by the personal stories of successful businessmen and poli-
ticians who came from disadvantaged backgrounds.38 Not incidentally, people
in the United States, another “land of opportunity,” also have a high rate of
acceptance of income inequality (the ratio is 0.82). The Gini coefficients that
measure actual income inequality in both the United States and Hong Kong
are among the highest of the high-income countries.

36 Osberg and Smeeding, “Fair inequality,” pp. 450–73.

37 World Bank, World Development Report (New York: Oxford University Press, 2007).
38 For example, the appointment of Wong Yan Lung, the son of a street peddler, as Secretary for Justice
was termed a “Hong Kong story.” The appointment of K.C. Chan, the son of a taxi driver, as Secretary
for Financial Services and the Treasury was seen as another “Hong Kong legend” by the local media.
 Income Inequality and Distributive Justice 1047

Probably as a result of the experience of socialist egalitarianism, Chinese

people in the mainland seem to believe that income inequality is not as fair as
the Chinese people in Hong Kong do. However, compared to other countries,
people in the mainland still have very high normative support for income
inequality. Kelly and Zagorski’s research39 also found that people in Poland
and Hungary, after the fall of communism, had more normative support for
income inequality than their Western counterparts. In China, increasing income
inequality has been perceived as a “necessary evil” to improve efficiency during
the economic reforms.40 China’s rapid economic growth in the past few decades
has also created a perception of new opportunities for those who have lagged
behind.

Attitude about inequality and perception of opportunities

The extent to which people perceive income inequality to be equitable may be
associated with the perceived opportunities in the society. In both the China
and Hong Kong surveys, respondents were asked to answer a set of questions
to measure their attitude towards inequality using a five-point scale (from
strongly agree to strongly disagree). The five questions were not identical in
the two surveys but were all related to attitudes towards inequality and percep-
tions of opportunity. Table 4 presents the respondents’ answers to those questions
(in percentages). For brevity, I aggregate “strongly agree” and “agree” into one
category and “disagree” and “strongly disagree” into another. However, the
mean is calculated on the five-point scale, with “strongly agree” coded as 1
and “strongly disagree” as 5. Therefore, a mean score lower than 3 (the average)
indicates an attitude leaning towards “agree.”
Nearly 85 per cent of mainland respondents and 60 per cent of Hong Kong
respondents agreed to tax the rich more to help the poor. Despite the general sup-
port for this leftist policy, people believe that there are still sufficient opportu-
nities in both societies: in China, 80.3 per cent of respondents believe in “equal
opportunities if smart enough” and 74.8 per cent agree that “peasants’ and
workers’ children have equal chances”; in Hong Kong, 75.7 per cent of respon-
dents agree that “Hong Kong is full of opportunities” and 58.4 per cent agree
that “Hong Kong is a place for competent people.” On the other hand, many
respondents do not think that the government has done sufficient work to
curb the rising income inequality: only 40.3 per cent agreed that “the Hong
Kong government takes good care of the poor” and an even lower percentage
(22.9 per cent) in China stated that “the government did a good job to help
the poor.”

39 Kelley and Zagorski, “Economic change and the legitimation of inequality.”

40 Li Yining, “Reducing income gap.”
1048 The China Quarterly, 200, December 2009, pp. 1033–1052

Table 4: Attitude about Inequality and Perception of Opportunities

Strongly agree Neutral Disagree or Mean
or agree (%) (%) strongly disagree
(%)
China
(1) Tax the rich more to help 85.0 8.1 6.9 1.86
the poor
(2) It is fair that some earn 59.7 13.0 27.3 2.58
more and some less
(3) Equal opportunities if 80.3 6.9 12.8 2.08
smart enough
(4) Peasants/workers’ kids 74.8 8.0 17.3 2.21
have equal chances
(5) Government does a good 22.9 38.3 38.8 3.23
job to help the poor
Hong Kong
(1) Tax the rich more to help 59.3 21.4 19.3 2.47
the poor
(2) HK is full of opportunity 75.7 14.1 10.1 2.20
(3) HK is an equitable 51.1 20.0 16.9 2.43
society
(4) HK is a place for 58.4 20.7 6.6 2.20
competent people
(5) HK government takes 40.3 22.0 37.7 2.98
good care of the poor
Notes:
Data are weighted.
Sources:
China General Social Survey (2005); Hong Kong Social Inequality and Mobility Survey (2007).

To what extent are the attitudes towards income inequality and perceptions of
opportunities related to the fairness of income distribution in people’s minds?
Table 5 reports the results of a series of OLS regressions of the attitudes evaluated
on the five-point scale on the fairness index.
Because this index is highly skewed, I take the logarithm of the fairness index
as the main independent variable in the linear regression analysis, and include
education, gender, age and age square as the control variables. Education is
measured in four levels and converted to three dummies in the model, and
male is coded as a dummy variable (yes = 1). Except for question 3 in the
China survey, the results show that the fairness index is a significant predictor
of a person’s attitude towards inequality. In both China and Hong Kong, if
people believe that the perceived actual income distribution is fairer, they tend
to disagree to tax the rich to help the poor (indicated by the positive coefficient)
and tend to agree that there are equal opportunities and merit-based competition
in the society (indicated by the negative coefficient). Hence, the relationship
between the fairness index based on the “should earn” and “do earn” ratio
and the perceptions of opportunities are associated with each other. Because of
data limitation, the causal relationship cannot be established. A single index of
Table 5: Attitude about Inequality and Perception of Opportunity and Fairness in China and Hong Kong
China Hong Kong
(1) (2) (3) (4) (5) (1) (2) (3) (4) (5)
Fairness index 0.067** −0.094** −0.037 −0.186*** −0.192*** 0.260** −0.210** −0.239** −0.256*** −0.339***
(logged)
(0.025) (0.034) (0.029) (0.032) (0.029) (0.089) (0.071) (0.081) (0.067) (0.093)
Education:
Junior high 0.032 0.063 −0.019 −0.079* 0.038 −0.156** −0.010 0.033 0.019 0.059
school
(0.024) (0.033) (0.028) (0.031) (0.028) (0.059) (0.047) (0.053) (0.044) (0.062)
Senior high 0.029 0.175 −0.010 0.031 0.151*** 0.052 −0.067 −0.043 −0.031 −0.067
school
(0.028) (0.038) (0.006) (0.035) (0.032) (0.050) (0.040) (0.451) (0.037) (0.052)
College or 0.080* 0.023 0.136** 0.093 0.157*** 0.166** −0.212*** −0.133** −0.058 −0.026
above

Income Inequality and Distributive Justice

(0.038) (0.052) (0.043) (0.048) (0.044) (0.054) (0.044) (0.049) (0.041) (0.057)
Male −0.003 0.006 −0.036 −0.032 0.013 −0.024 0.062* 0.040 0.032 0.007*
(0.020) (0.027) (0.023) (0.025) (0.023) (0.033) (0.027) (0.030) (0.025) (0.035)
Age −0.013* 0.010 −0.010 0.006 0.003 0.001 −0.016* 0.028** −0.008 −0.019
(0.005) (0.007) (0.006) (0.007) (0.006) (0.100) (0.008) (0.009) (0.008) (0.011)
Age2 *104 1.061 0.041 0.076 −0.073 −0.029 0.054 1.952 −2.954* 0.861 2.185
(0.609) (0.083) (0.069) (0.077) (0.060) (1.266) (1.018) (1.151) (0.951) (1.331)
Constant 2.183*** 2.144*** 2.368*** 2.126*** 3.090*** 2.405*** 1.893 1.793*** 2.344*** 2.554***
(0.121) (0.165) (0.137) (0.153) (0.139) (0.183) (0.147) (0.166) (0.137) (0.192)
F 7.01 7.57 4.89 7.75 10.73 6.44 7.56 7.59 3.17 3.91
df1/df2 7/7594 7/7560 7/7600 7/7585 7/7564 7/3754 7/3754 7/3754 7/3754 7/3754
R2 0.007 0.007 0.005 0.007 0.010 0.012 0.014 0.014 0.006 0.007
N 7602 7586 7608 7593 7572 3762 3762 3762 3762 3762
Notes:
Data are weighted. Figures in the parentheses are standard errors. ***p < .001 **p < .01 *p < .05.

1049
1050 The China Quarterly, 200, December 2009, pp. 1033–1052

fairness thus can be used to examine the social and political consequences of
distributive justice in future research.

Summary and Conclusions

To sum up, this article has adopted a different approach to examining increasing
income inequality in two Chinese societies with distinct institutional legacies:
reforming socialist China and laissez-faire capitalist Hong Kong, both suffering
from high income inequality. I make a distinction between equity and equality in
the discussion of the social and political consequences of increasing income
inequality. In particular, I argue that whether an income gap is large or not is
subject to the normative/value judgement of the public. In this respect, both cul-
ture and institutions play an important role in legitimizing income inequality.
Using survey data collected in China and Hong Kong, I compare people’s atti-
tudes about income inequality and their perceptions of opportunities, and by
implication their attitudes about government policies. The results dismiss the con-
ventional wisdom that Chinese people tend to favour absolute egalitarianism.
Instead, the analysis reveals that both societies have certain degrees of tolerance
for income inequality, although respondents in China appear to be less tolerant
of income inequality than those in Hong Kong.
A unique feature of the data analysed in this article is that respondents were
asked to estimate the “do earn” and “should earn” income for a list of occu-
pations, following the designs used in the International Social Survey
Programme. Comparing the “do earn” and “should earn” income for each occu-
pation shows that people in Hong Kong believe that the pay is fair in general:
workers in each occupation deserve what they are paid except for those in the
low-status occupations, who are underpaid, and senior government officials,
who are slightly over-paid. In contrast, in China, although people also believe
that farmers and workers are underpaid, they think that senior government offi-
cials and executives in large state-owned companies are overpaid by a large
amount. This may explain why income inequality has led to a high degree of per-
ceptions of unfairness and wide social discontent in the mainland.
Compared to most other countries with available data, both mainland and
Hong Kong respondents have a very high rate of normative acceptance of income
inequality. The Gini coefficients of “do earn” and “should earn” income are cal-
culated to measure perceived inequality and legitimate inequality. The results
suggest that perceived income inequality is not distorted in reality, that is, people
have recognized the high income inequality in their societies. On the other hand,
this high inequality is considered legitimate, as indicated by the fairness index
determined by the ratio of the two Gini coefficients.
Why do people think that high income inequality is fair? I further examine per-
ceived opportunities in China and Hong Kong based on a set of attitude ques-
tions and their relationships with the fairness of perceived income inequality.
I found that both mainland and Hong Kong respondents are surprisingly
 Income Inequality and Distributive Justice 1051

optimistic about opportunities for social mobility and this is positively associated
with their sense of the fairness of income distribution.
The perception of distributive justice also affects their support of government
tax policies and their evaluation of government performance in addressing the
problem of large income disparities. If people feel that the income distribution
is unfair, they are more likely to support left-wing initiatives to tax the rich
more to help the poor, and they are more likely to disagree with the statement
that the government has done a good job to help the poor. Such subjective evalu-
ations may lead to further political participation.
The findings of this article suggest the importance of a subjective dimension,
which has largely been neglected, in studying the relationship between inequality
and social/political stability in a society. As John Rawls put it, “a society is well-
ordered, when it is not only designed to advance the good of its members but
when it is also effectively regulated by a public conception of justice.”41
Therefore, high inequality measured by Gini coefficients in the two Chinese
societies may not necessarily lead to continuous and unsettling struggles that
could challenge the legitimacy of the social institutions and the state, because
there is a core Chinese belief that talent, education and hard work are the key
routes to economic success as well as an optimistic perception of opportunities
for mobility. This conclusion does not mean that political leaders in China and
Hong Kong should not seriously address the problems of rising income inequal-
ities, particularly the unmet needs of the most disadvantaged. Rather, if well
informed about the subjective factors in income distribution, policy makers
could do more to alleviate the social discontent and anger about rising inequality
that may pose great challenges to social and political stability.

Appendix A: Descriptive Statistics for Demographic Characteristics of the

Samples Included in Analysis: China and Hong Kong Surveys
China Hong Kong
Male 46.2 46.7
Education
Primary school or below 36.5 27.2
Junior high school 33.2 20.3
Senior high school 21.8 36.8
College or above 8.5 15.7
Age 40.06 (11.04) 41.43 (12.06)
Age2 1,727 (886.0) 1,862.5 (997.0)
N 8,696 4,013
Notes:
Data are weighted. Figures in the parentheses are standard errors for continuous variables.
Sources:
China General Social Survey (2005); Hong Kong Social Inequality and Mobility Survey (2007).

41 John Rawls, A Theory of Justice (Cambridge, MA: Harvard University Press, 1971), pp. 4–5.
1052 The China Quarterly, 200, December 2009, pp. 1033–1052

Appendix B: Perceived Monthly Income Measured as “Do Earn” and “Should

Earn” for Selected Occupations in China and Hong Kong (Excluding
Respondents’ Own Occupation).
A: Do earn B: Should earn C: Ratio: A/B
China
1. Farmer 463 787 0.59
2. Peasant worker 785 1,076 0.73
3. Urban factory worker 970 1,326 0.73
4. Professor 4,331 4,529 0.96
5. Senior government official 5,979 4,429 1.35
6. CEO in large company 26,720 23,682 1.13
Ratio: highest/lowest 57.7 30.1 –
Hong Kong
1. Cleaner 4,800 6,313 0.76
2. Factory worker 6,257 7,473 0.84
3. Office clerk 7,655 8,874 0.86
4. Lawyer 53,955 57,600 0.94
5. Corporate executive 54,147 62,201 0.87
6. Professor 75,383 76,754 0.98
7. Doctor in private practice 77,957 81,180 0.96
8. Senior government official 155,141 145,203 1.07
Ratio: highest/lowest 32.3 23.0 –
Notes:
Due to data limitation, respondents’ occupations cannot be matched exactly to the listed occupations here. In calculating the
averages of “do earn” and “should earn” for a specific occupation, I exclude respondents with approximately similar occupations.
Sources:
China General Social Survey (2005); Hong Kong Social Inequality and Mobility Survey (2007).