Per capita disposable income in urban and rural China 1990-2023

In 2023, the average annual per capita disposable income of rural households in China was approximately 21,691 yuan, roughly 40 percent of the income of urban households. Although living standards in China’s rural areas have improved significantly over the past 20 years, the income gap between rural and urban households is still large.

Income increase of China’s households

From 2000 to 2020, disposable income per capita in China increased by around 700 percent. The fast-growing economy has inevitably led to the rapid income increase. Furthermore, inflation has been maintained at a lower rate in recent years compared to other countries. While the number of millionaires in China has increased, many of its population are still living in humble conditions. Consequently, the significant wealth gap between China’s rich and poor has become a social problem across the country. However, in recent years rural areas have been catching up and disposable income has been growing faster than in the cities. This development is also reflected in the Gini coefficient for China, which has decreased since 2008.

Urbanization in China

The urban population in China surpassed its rural population for the first time in 2011. In fact, the share of the population residing in urban areas is continuing to increase. This is not surprising considering remote, rural areas are among the poorest areas in China. Currently, poverty alleviation has been prioritized by the Chinese government. The measures that the government has taken are related to relocation and job placement. With the transformation and expansion of cities to accommodate the influx of city dwellers, neighboring rural areas are required for the development of infrastructure. Accordingly, land acquisition by the government has resulted in monetary gain by some rural households.