Special Address: 'Income Inequality in the Past Three Decades: Globally, in Advanced Economies, and in China'

China’s growth and the rise of Asia in the 21st century have driven down global inequality generated in the 19th century.

The long-term evolution of global inequality can be dissected into three periods –

the first accelerated rise of inequality from the 1820s driven by the Western industrial revolution and World War 1, the steadier peak of the global Gini index spurred by World War 2 and US dominance, and the current decline in global inequality as Asia mirrors the Western growth, even though inequality remains high.

China held one of the key roles in the rise of Asia and in reducing global inequality since 1978.

However, their impact on reducing global inequality is diminishing in the recent decade as China’s growth towards a higher income status will eventually generate inequality.

China’s recent economic policies have shifted inwards in reducing inequality within the country.

The focus has been on the removal of entrenched poverty within the country as well as embarking on anti-corruption and anti-monopoly campaigns.

The future trajectory of global inequality is uncertain.

China can no longer be an engine of global inequality reduction.

In fact, the country’s movement towards high-income status will add to the global income inequality.

Global inequality cannot be reduced without the convergence of India and Africa.

However, India’s recent poor economic performance—compared to their accelerated growth post-1991—and Africa’s longstanding low growth indicate that the decline in global inequality may stall or even reverse.

Rich countries have shown strong economic rebound despite the pandemic, although it is uncertain whether the trend will continue.

While global inequality analyses are still preliminary, there are trends of diverging mortality and morbidity between the rich and the poor.

Don’t fixate on equality, but definitely do not lose attention of it.

Global inequality illustrates the convergence of the material conditions in the world.

Large income gaps between nations and unfavourable demographics such as ageing induce migration and movement of labour.

The change in global income distribution has real effects on national policies and perception of the global elite.

The relative decline of US comprising the global top 1% compared to that of Asian countries, especially China, has spurred political reactions and promotion of nationalistic policies such as Brexit and Trump’s campaign.

There has been an increasing awareness on global inequality and stronger push on policymakers to take action.

The recent release of the Pandora Papers and other policy discussions globally gives an optimistic outlook that there is more push on political forces to implement changes.