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Social Tensions in a Growing ChinaNanak KakwaniShi LiXiaobing WangShanshan Wu* AbstractIn spite of fast growth and increasing average income levels, China’s development has been uneven across various sectors and regions. This uneven development has reduced the life satisfaction of many people and has caused social tensions. Using four rounds of the Chinese Household Income Project data, this paper investigates social tensions caused by inequality, poverty and polarization across rural and urban areas, and across the Eastern, Central and Western regions, and between the emerging super provinces/megacities and the rest. It shows that although tensions have been significantly alleviated by fast economic growth, the impact of growth imbalances is still very severe. China should focus on more balanced growth in addition to a high rate of growth.JEL classification: I32; I38; O12; O18Keywords: Poverty; Inequality; Social Tension; Welfare; China_________________________* Kakwani, China Institute for Income Distribution, Beijing Normal University, No. 19, XinJieKouWai St., HaiDian District, Beijing 100875, China, and School of Economics, The University of New South Wales, Sydney, NSW 2052, Australia; Email: n.kakwani@unsw.edu.au; Li, China Institute for Income Distribution, Beijing Normal University, No. 19, XinJieKouWai St., HaiDian District, Beijing 100875, P. R. China. Email: lishi@bnu.; Wang, Department of Economics, The University of Manchester, Oxford Road, Manchester M13 9PL, UK, and School of Economics, Renmin University of China. Email: Xiaobing.Wang@manchester.ac.uk; Wu, China Institute for Income Distribution, Beijing Normal University, No. 19, XinJieKouWai St., HaiDian District, Beijing 100875, China. Email: wushanshan_bnu@; The authors would like to thank Yangyang Shen, Nick Weaver, Ning Xue and seminar participants at Beijing Normal University, Institute of Population and Labour Economics at Chinese Academy of Social Sciences, University of Manchester, and Renmin University for useful comments and suggestions.1. IntroductionWith significant economic achievements in both GDP and living standards, China has lifted hundreds of millions of people out of poverty since 1978. However, the rural-urban divide and regional inequality have both increased dramatically. The fruits of economic development have not benefited the people of China equally, which has led to a higher degree of social tension and even social unrest. This social tension might not only threaten China’s future growth but also significantly reduce people’s welfare. This paper analyses China’s social tension through an analysis of poverty, inequality and polarization.China had been growing at nearly 10 percent per annum for more than 30 years before 2012, and even when slowed down after 2012, the growth rate has been still above 6.5 percent. China’s total GDP measured by Purchasing Power Parity (PPP) surpassed the US in 2015 and is predicted to become the world’s largest economy in terms of GDP at market exchange rates within the next decade. China’s per capita GNI has grown from US$200 in 1978 to US$8,260 in 2016 (World Bank 2017). China has been successfully transformed from a weak peasant economy to a higher middle-income country. However, in spite of this achievement, it is facing various economic and social challenges. Inequality has, for much of the recent period, been high with a Gini coefficient being above 0.47 (National Bureau of Statistics, various years). There has been both a substantial rural-urban divide and a regional divide in income, consumption, education, healthcare, pensions and many other indicators of the standard of living (Li et al. 2013, Wang et al. 2013; Wang et al. 2016). These gaps might contribute to substantial social problems and social tension. China’s achievements in alleviating poverty are evident. The success in poverty reduction is inextricably linked to the rapid economic growth and the government’s poverty alleviation programs. In 1978, the vast majority of China’s population earned less than the World Bank’s poverty line, measuring extreme poverty, of $1.90 per day in 2011 PPP dollars. China has only 42 million people living in poverty in 2017 and is on trend to eradicate extreme poverty in 2020. (Kakwani et al 2018) At the beginning of the reform period, people were equally poor, and China was often seen as an egalitarian country. The national Gini coefficient of income in the early 1980s was only about 0.30. However, since then, China’s inequality has increased dramatically with the Gini coefficient reaching 0.49 in 2008 according to the China’s National Bureau of Statistics (NBS). This is substantially higher than 0.40, the international alert line suggested by UN Habitat. Since 2008, the Gini coefficient has declined to around 0.47. Regarding urban and rural areas, the income gap between rural and urban areas in China has been on the rise. The Gini coefficient within rural residents increased from 0.26 in 1980 to 0.40 in 2013, and that within urban areas increased from 0.16 in 1978 to 0.39 in 2013 (NBS). Despite the high economic growth, the increasing inequality in China implies that not everyone has enjoyed the fruits of the reform and growth equally. While growth increases people’s welfare, inequality may reduce the welfare of the poor and may induce social tension. There have been tens of thousands of public protests and incidents in the 2000s, and the Chinese government has made tremendous efforts attempting to alleviate social tensions, but many of their policies have not been effective. Many of these problems can potentially slow down the growth and even derail China’s growth, making China fall into the middle-income trap. In order to examine these issues, we need consistent measures of indicators for these various dimensions of inequality, poverty and polarization across time. It is also essential to understand the emergence of China’s middle class. There have been many claims of about social immobility due to lack of opportunities, and other problems including high and increasing living cost in big cities and differential access to quality education.Sen (1999) argues that development should be viewed as an effort to advance the real freedoms that individuals enjoy, rather than simply focusing on metrics such as GDP or income-per-capita. Other factors such as poverty and inequality also affect social welfare, as these have impact on the capabilities and freedom of people. A lot has been written on social welfare, poverty and inequality of China, there has been very little research on social tension. This is an area that concerns the stability of the society and the sustainability of economic development. A better understanding of the evolution of social tension is of significant importance for any developing countries, especially the transitional economics like China, where the society is under dramatic change. If not well managed, social tension can translate into social unrest and social turmoil. This paper aims to derive social welfare functions that explicitly incorporate judgments about various types of social tension. Such social welfare functions provide the basis for the measurement of social tension. We apply these social welfare functions in China’s case with an empirical analysis of levels and trends of various types of social tension in the country from 1995 to 2013, using data from a national household survey called the Chinese Household Income Project (CHIPs).The rest of the paper is organized as follows: section 2 discusses methodologies. Section 3 describes the data used in this paper. Section 4 provides the results and analyses the possible causes of social tension. Section 5 concludes and hints at some possible policy implications.2. Assessing Social TensionSocial welfare and social tension can be caused by many non-income factors such as a malfunctioning justice system, insecurity, and discrimination in society. However, this paper focuses on the measure of social tension in income space. An individual’s utility can be measured by three approaches (see for example, Boyce et al, 2010). The absolute utility theory argues that higher income leads to higher utility, and comparison in utility can be drawn from comparison in absolute income. It argues that money and happiness are assumed to be causally linked, and higher incomes should lead to greater happiness. The second approach is the reference-income hypothesis which suggests that individuals care about how their income compares with the norm, or reference income, of a socially constructed comparison group. Individuals gain utility to the extent that their income exceeds the average or reference income of people in their comparison set and lose utility to the extent that their own income falls below the reference level. The third approach is the rank-based utility theory, where people gain utility from occupying a higher ranked position within an income distribution rather than from either absolute income or their position relative to a reference wage.Although absolute utility is important, the relative utility of the second and the third approaches dominate the models of income comparison. Social comparison is likely to arise from a concern about relative or ranked position in income distribution. As rank of income significantly affects life satisfaction, increasing an individual’s income will improve his or her utility only if ranked position also increases and will necessarily reduce the utility of others who will lose rank (Rablen, 2008; Boyce et al, 2010). If an individual’s utility derives from relative or ranked positions within a comparison group, as well as from absolute amount of wealth, inequality and polarization would have significant impact on people’s welfare and on social tension.Social welfare depends on mean income and its distribution. The maldistribution of income provides the measures of social tension. Specifically, this paper studies uses uneven income distribution, poverty, and polarization to explain the seriousness and the changes of social tension in China. Each dimension is analysed individually to identify the type of social tension that has an increasing or decreasing trend over time. An increasing social tension can become a source of social unrest, so it is imperative to measure trends in individual social tensions. 2.1 Social Tension Caused by InequalityInequality is one source of social tension. Social tension due to inequality can be measured using the Gini social welfare function, which gauges how much relative deprivation the society suffers. Individuals lose their welfare when they find out that their income is lower than others. We derive a Gini social welfare function that is interdependent and captures the idea of relative deprivations suffered by individuals across different levels of income.An individual with income x compares her income with all other individuals in the society. She selects other individuals one by one and makes all possible comparisons. Suppose she selects an individual with income y and feels deprived upon discovering her income x is lower than incomey. She therefore suffers a loss of welfare. There is no loss of welfare if her income is higher than the compared income. That is, when x≥y，The welfare of an individual, with income x, when she compares with another individual, with income y, is given by:ux,y=x if x≥yux,y=x-y-x if x<ySuppose the income x of an individual is a continuous random variable with mean μ and probability density functionfx. Then, in all pair-wise comparisons, her expected welfare denoted by ux is obtained by:ux=x-u1-F1x+x1-Fx （1）where Fxis the distribution function, which is interpreted as the proportion of population with income less than x. F1x is defined asF1x=1u0∞xfxdxwhich is the proportion of income enjoyed by individuals with income less than or equal to x. Differentiating this twice givesu'x=2-Fxu''x=-fxwhich implies that the individual’s (expected) welfare is an increasing function of income and is concave. This is the basic requirement of any utility function.The average welfare of the society is then obtained asWG=0∞uxfxdx=20∞x[1-Fx]fxdx=?1-G 2where ? is the average income, G is the Gini index, and ?1-G is the Gini social welfare function. The average deprivation suffered by the society is measured by the Gini index, which can be viewed as a proportional loss of social welfare. Thus, the Gini index is a measure of social tension caused by inequality in the society. 2.2 Social Tension and PovertyThe poverty line specifies the society’s minimum standard of living. The non-poor are assumed to not suffer any deprivation. An individual suffers deprivation, which results in loss of welfare, when her income is less than the poverty line. The welfare of an individual with income x is given bywx=x-gz,x if x<z =x if x≥ywhere z is the poverty line and gz,x is the deprivation suffered by the poor. Given this, the average welfare of the society can be given byW=μ-0zgz,xfxdx where μ is the mean income of the society. The second term on the right-hand side of refers to social deprivation due to poverty.Following Kakwani and Son (2016, ch3), the average welfare of the society can be written asWα=μ-HzθαH 1α (4)Where θα is the FGT class of poverty measures (Foster, Greer and Thorbecke, 1984) given by θα=0zz-xxαfxdx (5)where is the parameter of inequality aversion. For, that is the head-count ratio. This measure gives equal weight to all the poor irrespective of the intensity of their poverty. For =1, each poor person is weighted by his or her distance from the poverty line, relative to z. This measure is called the poverty gap ratio. For =2, the weight given to each poor is proportional to the square of his or her income shortfall from the poverty line. This measure is called the severity of poverty ratio, which has the desirable property of being sensitive to the distribution of income among the poor, thus making poverty sensitive to income transfers among the poor.Wα in equation (4) shows that there is an implicit social welfare function for each member of the FGT class of poverty measures, except the headcount ratio. The second term on the right-hand side of equation (4) is the welfare loss due to the existence of poverty. Given this, the proportional loss of social welfare due to poverty can be obtained from (4) as Pα=zH α-1α (θα) 1α μ (6)which is the proposed measure of social tension because of poverty. The measure of social tension for the poverty gap ratio is obtained by substituting =1 in equation (6) asp1=zθ1μ (7)where θ1 is the poverty gap ratio. Similarly, a measure of social tension for the severity of poverty is obtained by substituting =2 in equation (6) asp2=zHθ2μ (8)where θ2 is the severity of poverty ratio.Note that inequality-neutral growth does not change the relative social tension measures caused by inequality in the society such as the Gini index. Thus, inequality-neutral growth reduces the poverty tension, but has no impact on the inequality tension.Ideally, society should aim at reducing both inequality and poverty tensions, but such a scenario is not very common in developing countries. As we will show later in China inequality has been increasing at the same time that poverty has been declining rapidly.2.3 Social Tension and Polarization A society is said to be polarized when it is divided into groups with substantial intra-group homogeneity and inter-group heterogeneity. Based on this definition, Esteban and Ray (1994) identified two distinct notions of polarization. The first is alienation, which measures how far apart different groups are. The second is identification, which measures how closely the members of a group are aligned with each other, sharing common aspirations and values. Social conflicts may potentially arise due to the existence of such groups.The concept of polarization is directly linked to social tension. However, the link between social welfare and polarization has not been well discussed in the literature. To measure social tension, this section derives a social welfare function that embodies the essential elements of social tension caused by polarization.The notion of alienation is measured by the degree of spread from the middle position (median) to the tails of the income distribution. A larger spread from the median implies a smaller middle class and larger polarization, whereby the rich become richer and the poor become poorer. This causes social tension. The social welfare function that incorporates the idea of alienation is derived as follows.A person is assumed to be alienated if her income deviates substantially from the middle. Suppose m is the median income, then her alienation is given by the difference between the individual income and the median. The utility that takes account of alienation from the median may be defined as:ux=x-m-x if x<mux=x-x-m if x>mThus, the average welfare of the society is obtained asWA=u-m2-m12 (9)where m1 and m2 are the mean incomes of the population having income below and above the median income, respectively. WA is the social welfare that accounts for alienation in the society. The proportional loss of social welfare due to alienation is given byA=m2-m12u (10)The larger the A, the greater is the alienation in the society. A is the proposed measure of social alienation.The second aspect of bi-polarization refers to the case where incomes below the median or above the median become closer to each other. The polarization increases when the two groups become homogeneous.Following Kakwani and Son (2016, ch3), the proportional loss of social welfare due to polarization is given byB=2A-G (11)where A is the measure of social alienation and G is the Gini index. This measure can also be expressed as B=2GB-GW (12)where GB and GW are the between- and within-group inequalities when the two groups are formed by the populations having income less and greater than the median income, respectively. 3. Data Analysis 3.1 DataThe data used for this section is the four rounds of the Chinese Household Income Project (CHIPs) in the year 1995, 2002, 2007, and 2013. The first two rounds were collected by the Chinese Academy of Social Sciences and the National Bureau of Statistics. The latter two were completed by the China Institute for Income Distribution and the National Bureau of Statistics. The CHIP study is arguably the best publicly available data source on Chinese household income and expenditures (Riskin, Zhao and Li, 2001). These data remain the only source of household level information on income and other individual and household characteristics that are representative of China as a whole. (Gustafsson, Li and Sicular, 2008).The CHIP sample is a subset of a larger survey done by the National Bureau of Statistics (NBS) and the income data from NBS are more detailed and accurate. The general practice in previous studies is to use the National Bureau of Statistics records for income data.Since the cost of living varies across provinces, in order to improve the comparability of data, we adjusted income by deflating the incomes by the spatial price indices for different provinces of China (where the numeraire equals a national average consumption basket). The 1995-2007 income data were adjusted using CPI and regional PPP with 2013 as base year. Thus, our welfare measures are the real per capita disposable household income.3.2 Descriptive Data AnalysisTable 1 shows the average income of three geographic regions, and rural and urban sectors within these regions. From 1995 to 2013, the national income level of the whole population is on the rise. In 1995, the average national income per capita was 4,111 yuan, and the per capita income of the households in 2013 was 18,781 yuan. The per capita income gap between rural and urban was growing before 2007 but has subsequently begun to narrow. In 1995, the average per capita income of urban residents was 7,301 yuan, which was 2.6 times of rural per capita income (2,796 yuan). In 2013, the income of urban residents was 2.80 and 1.38 times of that of the rural residents (9,914 yuan) and migrant workers (20,077 yuan), respectively.Figure 1 compares the regions graphically and shows the percentages of average household income per capita in the Western and Central regions, comparing to the Eastern region. As can be seem, the per capita income gap in the Eastern, Central and Western regions widened from 1995 to 2002, and narrowed in 2002-2007, but the gap widened again after 2007. The per capita income in the Western and Central regions was about 61%-66% and 52%-62% of the Eastern regions, respectively. The per capita income of households in the Western urban areas was only lower than that in the Central region in 2007, and the other years were higher than those in the Central region. The income of the migrant population in the Western region is higher than that in the Eastern region, but this income gap is shrinking. Table 1 Descriptive StatisticsYear　TotalEastCentralWest1995total4,111 5,316 3,436 3,250 urban7,301 8,719 5,713 6,645 rural2,796 3,546 2,576 2,156 2002total6,123 8,143 5,003 4,703 urban10,799 12,764 8,777 9,682 rural3,667 4,985 3,263 2,680 migrant9,087 9,909 6,875 8,306 2007total10,780 14,700 9,081 7,682 urban18,139 22,591 15,344 14,233 rural5,197 7,007 4,742 3,866 migrant17,269 18,899 13,179 16,483 2013total18,781 23,573 15,710 14,790 urban27,790 32,701 23,364 23,782 rural9,914 12,895 8,745 7,952 migrant20,077 20,284 18,938 20,493 Note: using 2013 as base year and adjusted using PPP.Figure 1. Sectoral and Regional Comparisons of Income as a percentage of Eastern 23812532385000Note: using 2013 as base year and adjusted using PPP.Figure 2. Growth Rates across Sectors-160020321945Note: using 2013 as base year and adjusted using PPP.Figure 2 shows that there is a significant difference in income growth rates between different sectors and different percentiles of income. On the whole, the income growth rate of the high percentiles is higher than that of the lower percentiles with the exception of migrants between 2002 and 2007. The total population income growth rates of the high income population are significantly higher than that of others in 1995-2002. After 2007, the income growth rate of higher percentiles has slowed down. From 2007 to 2013, the growth rates of different income percentiles were similar, with the top 10 percentile growing faster, especially in the urban sector. The identification of reference groups is very important in the study of social tension. In our paper, in the study of the rural-urban divide and the regional divides our view is that rural people will compare themselves with urban people and people in one region will compare themselves with those in another region. Migrants will compare their incomes with those in their rural regions. However, for the migrants, with whom they reference is not a simple question. For migrants, it is even harder to set a reference group. Some migrants may select a certain group of urban residents as their reference group while some other migrants may regard rural residents in their hometown as the reference group. The choices of reference groups have big impacts on people’s welfare in terms of social tensions and subjective wellbeing. For example, in explaining why do rural–urban migrant households settle in urban China have an average happiness score lower than rural households, Knight and Gunatilaka (2010) argue that migrants use their rural residents as reference group when they make migration decisions, but their reference group changes to urban residents after couple of years of working and living in the urban areas. Thus with their income rise, their aspirations also change, thus their happiness level becomes actually lower.However, as our focus is the overall welfare of sectoral (rural-urban) and geographic reginal comparison, we focus our studies on the social tensions among those groups. We will show the results of each of the groups and produce estimates of social tensions so as to allow comparisons. 4. Empirical Analysis of Social Tension in China4.1 Social Tension Due to InequalityAs discussed in subsection 2.1, the social welfare is determined by the average income of the whole society and the size of the Gini coefficient: the higher the average social income, and/or the smaller the Gini coefficient, the higher the total social welfare. As such, social tension caused by inequality is measured using a social welfare function where the Gini coefficient is used as the measure of social tension.Table 2 reports the social welfare and social tension (as measured by the Gini coefficient) for both rural and urban sectors for the four sample years. It can be seen that the national income inequality and the income gap between urban and rural areas was had widened during 1995 to 2007, and started narrowing from 2007, the income inequalities within urban and rural areas are widening, especially in rural areas. The national social tension (i.e., Gini coefficient) increased slightly between 1995 and 2007, and declined significantly after 2007. Gini coefficients of urban and rural residents were always increasing. In 1995, the Gini coefficient of urban residents was the lowest (0.29), and it rose to 0.35 in 2013. The Gini coefficient in rural areas shows the same trend. However, the Gini coefficient of migrants increased between 2002 and 2007, decreased between 2007 and 2013. This is due to the fact that the number of migrant increased significantly, and their skills are very diverse in nature, with some of them having high skills and some of them have low skills, resulting a huge wage gap, and hence huge income inequality.Measured by the Gini social welfare function, China's social welfare level increased significantly. Social welfare was only 2,401 in 1995, it reached 10,500 in 2013. This is mainly due to the sustained and rapid growth of China's per capita income.In 1995, China carried out large-scale SOEs reform, where some state-owned firms were allowed to go bankrupt, and some laid-off large number of workers for the sake of improving efficiency. Despite the large unemployment in the following couple of years when the SOE reforms continued, the labour market structural adjusted and there were significantly improvements in economic efficiency and increase of labour income. Social welfare grew rapidly after 2002 when Chin joined WTO in December 2001. After 2007, there was continuous wage and income growth, partly because China introduced the Labour Contract Law in 2008, which protects labour’s legal rights and partly because China had crossed the first Lewis turning point, which means the abundant labour supply at extremely low wage level was running out (Wang and Piesse 2013, Wang and Weaver 2013). Table. 2 Social Welfare and Social Tension by SectorsYearSocial welfarePer capital household incomeSocial tension(Gini index)1995total2,4014,1110.4158urban5,1977,3010.2881rural1,8112,7960.35242002total3,4206,1180.4410urban7,30310,7760.3223rural2,3823,6670.3503migrant5,9669,1090.34512007total5,70010,7800.4712urban12,00518,1390.3381rural3,3085,1970.3635migrant11,96217,2690.30732013total10,50018,7810.4409urban18,16127,7900.3465rural5,9719,9140.3978migrant12,90720,0770.3571growth rateSocial welfarePer capital household incomeSocial tension(Gini index)95--02total5.185.850.84urban4.985.721.62rural4.003.95-0.0902--07total10.7612.001.33urban10.4510.980.96rural6.797.230.75migrant14.9313.65-2.2907--13total10.729.69-1.10urban7.147.370.41rural10.3411.361.51migrant1.282.542.53Table 3 reports the social welfare and social tension by three geographic regions: the most developed Eastern costal region, the backward Western region, and the Central region. It can be seen that the social tension in Central region is lower than that in Eastern and Western regions from 1995 to 2013. Before 2007, the regional social tension as a whole has been on an upward trend. However, after 2007, the social tension in various regions showed a clear downward trend, indicating that after 2007, the social tension as measured by the Gini coefficient has eased. This is partly due to the abolishment of agriculture tax and the introduction of basic healthcare and a pension system, which would have significant positive effects on the poor regions. (Wang et al 2013). In 2002-2007, there was a biggest increase of per capita family income. The increase in the Western region was significantly higher than that in the Eastern and Central regions after 2007. In terms of the social welfare growth rate, it can be seen that the Eastern region was the most rapid before 2002, the Central was slightly higher than that of the Eastern region during 2002-2007, and after 2007, the Western region was higher than the Eastern and Central regions, with a growth rate of 12.6% per year.Table. 3 Social Welfare and Social Tension by RegionsYear　Social welfarePer capital household incomeSocial tension(Gini index)1995Eastern3,090 5,316 0.4188 Central2,249 3,436 0.3456 Western1,899 3,250 0.4158 2002Eastern4,738 8,129 0.4171 Central3,038 5,000 0.3924 Western2,569 4,709 0.4545 2007Eastern8,059 14,700 0.4518 Central5,191 9,081 0.4284 Western4,069 7,682 0.4704 2013Eastern13,537 23,573 0.4257 Central9,073 15,710 0.4225 Western8,292 14,790 0.4394 growth rate　Social welfare Social tension(Gini index)95--02Eastern6.30 6.26 -0.06 Central4.39 5.50 1.83 Western4.41 5.44 1.28 02--07Eastern11.21 12.58 1.61 Central11.31 12.68 1.77 Western9.64 10.29 0.69 07--13Eastern9.03 8.19 -0.98 Central9.75 9.57 -0.23 Western12.60 11.54 -1.13 By looking at the Eastern, Central and Western regions, the regional differences are salient. However, the imbalance is more severe when we look at groups of provinces according to their development level. We divide the 34 provinces in China into three groups according to the level of per capita GDP in 2013, with the provinces with highest GDP per capita in tier 1 and the lowest in tier 3. As can be seen from table 4, prior to 2007, per capita income in the tier 1 provinces was almost double that of tier 2 and tier 3, indicating a huge income gap between provinces. After 2007, though the income growth rate of tier 2 and tier 3 groups has been higher relative to tier 1, the income gaps between provinces are still huge. Social tension, measured by the Gini coefficient, declined after 2007; Social welfare in tier 1 province was much higher than tier 2 and tier 3. However, the difference between tier 2 and tier 3 in social welfare is relatively small. Since 2007, social tension declined significantly, but it was still at the highest level in the least-developed tier.Table. 4 Social Welfare and Social Tension by TiersYear　Social welfarePer capital household incomeSocial tension(Gini index)1995Tier 13,448 5,804 0.4059 Tier 21,975 3,115 0.3659 Tier 32,078 3,358 0.3811 2002Tier 15,292 8,871 0.4034 Tier 22,819 4,678 0.3974 Tier 32,765 4,825 0.4270 2007Tier 18,992 15,913 0.4349 Tier 25,092 8,859 0.4252 Tier 34,322 7,962 0.4573 2013Tier 113,537 23,573 0.4257 Tier 29,569 16,521 0.4208 Tier 38,407 14,813 0.4325 growth rate　Social welfare Per capital household incomeSocial tension(Gini index)95--02Tier 16.31 6.25 -0.09 Tier 25.21 5.98 1.19 Tier 34.17 5.32 1.64 02--07Tier 111.18 12.40 1.52 Tier 212.56 13.63 1.36 Tier 39.34 10.54 1.38 07--13Tier 17.06 6.77 -0.36 Tier 211.09 10.94 -0.17 Tier 311.73 10.90 -0.93 4.2 Social Tension Due to PovertyTo study social tension due to poverty, we have to have an appropriate poverty line. In 2010 the State Council published the 2,300 yuan new poverty line for rural areas. Adjusted by CPI, this poverty line in 2013 is 2,736 yuan. The official poverty line of 2,736 Yuan per person per year for 2013 is about 28% of the average per capita real income. Based on equation (5), Table 5 shows the poverty incidence, poverty gap ratio, and severity of poverty in the FGT measure based on the 2013 poverty line of 2,736 yuan. We can see that the overall poverty incidence in China between 1995 and 2013 has decreased significantly, but there are differences in the rate of decline at different stages. The incidence of poverty fell by a rate of 6.12% between 1995 and 2002. The rate of decline in poverty incidence reduced to 13.51 in 2002-2007, and further reduced to 17.68 after 2007.We find that the incidence of poverty in urban populations in 2007 is less than the incidence of poverty in 2013. Moreover, in 2013, income of urban residents is more volatile. In 2013 data, many households/people have negative income. These negative incomes may have a greater impact on the incidence of poverty. In reality, people will be smoothing consumption, thus consumption would have a much smaller fluctuation than income. Thus, for 2007 – 2013, urban income inequality has deteriorated, but consumption inequality is declining. (see Kakwani et al 2018 for both income data and consumption data.) If the negative incomes in the sample are deleted, the incidence of urban residents in 2007 was 0.48; the incidence of urban residents in 2013 was 0.46, so the negative income in 2013 is the main reason of higher poverty incidence. The gap between the rich and the poor in 1995 was higher than that between them in 2002 and 2007, and the poverty gap ratio was reduced by an average of 9.58% after 2007. From the perspective of the poverty gap ratio, the rate of decline is very significant in the period from 1995 to 2007. However, the severity of poverty has been increasing after 2007.Table. 5 FGT Class of Poverty Measures by SectorsYear　Headcount ratioPoverty gap ratio Severity of poverty1995total45.9017.319.11urban5.181.200.50rural62.6723.9512.662002total29.509.884.63urban2.380.520.20rural44.0114.866.99migrant5.151.961.212007total14.274.743.34urban0.530.140.06rural24.808.255.84migrant0.340.140.112013 total4.442.598.77urban0.721.336.64rural8.634.0212.02migrant1.541.523.14Growth rateHeadcount ratioPoverty gap ratioSeverity of poverty95--02total-6.12-7.71-9.21urban-10.51-11.22-12.55rural-4.92-6.59-8.1402--07total-13.51-13.67-6.35urban-25.90-23.44-20.63rural-10.84-11.10-3.52migrant-41.77-41.40-38.6607--13total-17.68-9.5817.47urban5.0945.98118.10rural-16.14-11.2812.79migrant28.3949.5676.10Based on the equations (7) and (8), we obtained the poverty induced social tension indices in Table 6. With regard to the poverty gap ratio and the severity of poverty, the overall social tension is declining. The average declining trend in 2002-2007 is greater than that of the other two adjacent periods. The social tension of the urban residents is lower than that of the rural residents and the floating migrant population. After all, the income of the urban residents is obviously higher than that of the other two groups. The social tension of the migrant population is also lower than that of the rural population, and the main reason is again higher income. Table. 6 Social Tension Due to Poverty by SectorYear　Poverty gap ratio Severity of poverty1995total11.52413.61urban0.4500.60rural23.43527.562002total4.4165.227urban0.1320.173rural11.09113.084migrant0.5900.7502007total1.2021.752urban0.0210.027rural4.3456.335migrant0.0220.0302013total0.3770.909urban0.1310.215rural1.1102.810migrant0.2070.300Growth ratePoverty gap ratio Severity of poverty95—02total-12.80-12.78urban-16.03-16.32rural-10.14-10.1002—07total-22.92-19.64urban-31.01-30.90rural-17.09-13.50migrant-48.44-47.4107—13total-17.57-10.35urban35.9641.01rural-20.34-12.67migrant45.8546.63Tables 7 to 10, are similar to tables 5 and 6 but are by geographic regions and development tiers respectively. From table 7, we can see that the incidence of poverty in different regions decreased continuously from 1995 to 2013, and the incidence of poverty in the Eastern, Central and Western regions rose with it rising faster in the Central region than the Eastern and the incidence of poverty was the highest in the Western region. The poverty gap ratio and the severity of poverty also show similar characteristics. For both poverty gap and severity measures, social tension is lower in the Eastern region than that in the Central region, and that in the Central region is lower than that in the Western region. This is mainly due to the high per capita family income in the Eastern region. However, it can be seen that the social tension in the Western region is declining fast, indicating that social welfare in the Western region is constantly improving. Similar conclusions are drawn from the relative poverty line. Table. 7 FGT Class of Poverty Measures by regionsYear　Headcount ratioPoverty gap ratioSeverity of poverty1995Eastern33.54 12.14 6.85 Central48.70 16.89 8.42 Western59.40 24.78 12.96 2002Eastern15.00 4.94 2.38 Central33.36 10.17 4.44 Western44.18 15.97 7.77 2007Eastern6.92 2.68 4.21 Central13.58 4.09 1.88 Western24.59 8.14 3.90 2013Eastern2.40 2.08 9.43 Central4.96 2.68 5.64 Western7.21 3.33 11.80 Growth rate　Headcount ratioPoverty gap ratioSeverity of poverty95--02Eastern-10.86 -12.07 -14.02 Central-5.26 -6.99 -8.74 Western-4.14 -6.08 -7.05 02--07Eastern-14.34 -11.47 12.05 Central-16.45 -16.67 -15.74 Western-11.06 -12.61 -12.89 07--13Eastern-16.19 -4.18 14.41 Central-15.46 -6.78 20.05 Western-18.50 -13.85 20.29 Table. 8 Social Tension Due to Poverty by RegionsYear　Poverty gap ratioSeverity of poverty1995Eastern6.249 7.80 Central13.450 16.12 Western20.863 23.35 2002Eastern1.661 2.012 Central5.567 6.657 Western9.282 10.763 2007Eastern0.499 1.004 Central1.231 1.524 Western2.899 3.486 2013Eastern0.241 0.552 Central0.467 0.921 Western0.616 1.706 Growth rate　　　95--02Eastern-17.24 -17.61 Central-11.84 -11.87 Western-10.93 -10.47 02--07Eastern-21.36 -12.98 Central-26.05 -25.54 Western-20.76 -20.19 07--13Eastern-11.43 -9.49 Central-14.92 -8.05 Western-22.76 -11.23 Similarly, we discuss the incidence of poverty and the resulting social tensions by provinces of different development levels. From Table 9, we find that the incidence of poverty in provinces with high GDP per capita is significantly lower than that in the other provinces. The incidence of poverty in the Tier 1 provinces in 1995 was about half of that in the Tier 2 and Tier 3 provinces. The incidence of poverty in the Tier 1 provinces in 2002 and 2007 was only one-third that of Tier 2 and about half to one-third in 2013. The incidence of poverty in the Tier 3 provinces was only slightly higher than in the Tier 2 provinces. The poverty gap ratio in Tier 1 provinces was also significantly lower than the other two subgroups. Social tensions measured by the poverty gap ratio and severity of poverty, also show similar features, with the social tension in Tier 1 provinces being much lower than the other two groups, which have similar social tensions. Tier 1 provinces have a greater chance of enjoying social benefits, and the distribution of benefits is very uneven among provinces. Table. 9 FGT Class of Poverty Measures by TiersYear　Headcount ratioPoverty gap ratioSeverity of poverty1995Tier 128.72 9.92 5.66 Tier 254.02 21.90 11.86 Tier 354.36 20.50 10.34 2002Tier 111.84 3.57 1.60 Tier 235.79 12.52 6.12 Tier 339.33 13.18 6.10 2007Tier 15.03 2.19 4.34 Tier 214.12 4.40 2.19 Tier 321.14 6.77 3.16 2013Tier 12.40 2.08 9.43 Tier 25.44 3.16 8.28 Tier 36.12 2.87 8.29 Growth rate　Headcount ratioPoverty gap ratioSeverity of poverty95--02Tier 1-11.89 -13.58 -16.49 Tier 2-5.71 -7.68 -9.03 Tier 3-4.52 -6.12 -7.26 02--07Tier 1-15.75 -9.30 22.04 Tier 2-16.98 -18.88 -18.58 Tier 3-11.68 -12.48 -12.32 07--13Tier 1-11.61 -0.90 13.79 Tier 2-14.70 -5.33 24.82 Tier 3-18.66 -13.31 17.42 Table. 10 Social Tension Due to Poverty by TiersYear　Poverty gap ratioSeverity of poverty1995Tier 15.105 6.56 Tier 217.438 20.16 Tier 317.258 19.96 2002Tier 11.202 1.467 Tier 26.849 8.097 Tier 37.658 9.003 2007Tier 10.408 0.870 Tier 21.325 1.675 Tier 32.410 2.912 2013Tier 10.241 0.552 Tier 20.551 1.168 Tier 30.532 1.318 Growth rate　　　95—02Tier 1-18.66 -19.27 Tier 2-12.50 -12.22 Tier 3-10.96 -10.75 02—07Tier 1-19.44 -9.93 Tier 2-28.00 -27.03 Tier 3-20.64 -20.21 07—13Tier 1-8.40 -7.30 Tier 2-13.60 -5.82 Tier 3-22.27 -12.38 4.3 Social Tension Due to Alienation and PolarizationTo better understand the changes in social tension and analysing the changes in income, we should not only consider changes in the overall income gap and poverty, but also consider the income gap within the entire group, including different income distributions for different income groups. Table 11 reports a quantitative description of the income distribution. Between 1995 and 2013, the mean income increased by an annual average of 9.29%. The income growth of the 90th percentile was much higher than that of the 10th percentile; the difference was the largest between 1995 and 2002, and was the smallest between 2007 and 2013. A closer examination reveals that the income inequality was larger at the lower half of the distributions between 1995 and 2013. The income inequality of the high-income population (P90-P50) increased faster between 1995 and 2002 but changed only slightly between 2007 and 2013. Different measures of inequality show that the income inequality kept increasing between 1995 and 2013. Table. 11 Means, Deciles, and Variances of Log Income, 1995-2013Year1995200220072013Mean7.786 8.181 8.839 9.459 Median7.834 8.189 8.875 9.485 P106.760 7.102 7.686 8.317 P257.241 7.596 8.209 8.858 P758.359 8.797 9.488 10.095 P908.757 9.247 9.952 10.576 P50-P101.073 1.086 1.189 1.168 P90-P500.923 1.058 1.077 1.091 P90-P101.997 2.144 2.266 2.258 Var0.623 0.712 0.793 0.811 Notes: This is for the whole population without separating rural and urban. People’s welfare and the sense of happiness are often affected by the differences among income groups, thus it is very important to study social tension caused by income differentiation. Social tension caused by alienation and polarization may have a close relationship with a shrinking middle class in a society. The middle class can shrink as the society becomes more polarized. The size of the middle class can also be adversely affected by the phenomenon of alienation. Alienation is primarily concerned with the spread of income distribution from the median; the greater the spread, the smaller is the size of the middle class. In addition, polarization indicates the degree of homogeneity within the two groups. As can be seem from table 12, the growth rate of both alienation and polarization indices are positive most of the time for most groups with exception for migrants in 2002-2007, and total population between 2007 and 2013.Table. 12 Social Welfare and Social Tension Due to Alienation/Polarization by SectorsYear　Social welfareAlienationPolarization1995total1,7970.56290.2941urban4,4210.39440.2126rural1,4860.46870.23262002total2,4760.59530.3087urban6,0540.43820.2317rural1,9380.47160.2426migrant4,8710.46530.24052007total3,8540.64250.3424urban9,8600.45640.2366rural2,6560.48890.2508migrant10,1880.41010.20552013 total7,4770.60190.3219urban14,7930.46770.2425rural4,6110.53490.2742migrant10,4260.48070.2471Growth rateSocial welfareAlienationPolarization95--02total4.680.800.69urban4.591.511.24rural3.870.090.6002--07total9.261.542.10urban10.250.820.41rural6.510.730.67migrant15.90-2.50-3.1007--13total11.68-1.08-1.02urban6.990.410.41rural9.631.511.50migrant0.392.683.12From Table 13 we find that neither alienation nor polarization vary significantly between regions, with alienation roughly 0.53-0.63 and polarization between 0.25-0.35. The social welfare measure includes income information; therefore, social welfare in the Eastern region is higher than that in the other two regions, while the social welfare in the Western region is the lowest. However, the social welfare in the Western region has grown faster than the other two regions after 2007.Table. 13 Social Welfare and Social Tension Due to Alienation/Polarization by RegionsYear　Social welfareAlienationPolarization1995Eastern2,258 0.5752 0.3128 Central1,812 0.4727 0.2541 Western1,427 0.5609 0.2901 2002Eastern3,521 0.5668 0.2994 Central2,338 0.5324 0.2800 Western1,877 0.6014 0.2938 2007Eastern5,613 0.6182 0.3328 Central3,670 0.5958 0.3349 Western2,804 0.6350 0.3292 2013Eastern10,000 0.5758 0.3001 Central6,587 0.5807 0.3164 Western5,695 0.6150 0.3512 Growth rate　　　95--02Eastern6.55 -0.21 -0.62 Central3.71 1.72 1.40 Western3.99 1.00 0.18 02--07Eastern9.77 1.75 2.14 Central9.44 2.28 3.65 Western8.36 1.09 2.30 07--13Eastern10.10 -1.18 -1.71 Central10.24 -0.43 -0.94 Western12.53 -0.53 1.08 Table 14 shows the social welfare measured by per capita GDP among different tiers of provinces. As can be seen the gaps between Tier 1 and others are big, but the differences between Tier 2 and 3 are negligible. This shows the development imbalance between super provinces/megacities and others. However, in terms of alienation and polarization, the patterns among three tiers of the provinces are similar. Table. 14 Social Welfare and Social Tension Due to Alienation/Polarization by TiersYear　Social welfareAlienationPolarization1995Tier 12,529 0.5642 0.3166 Tier 21,544 0.5043 0.2768 Tier 31,623 0.5166 0.2710 2002Tier 13,974 0.5520 0.2972 Tier 22,163 0.5375 0.2802 Tier 32,074 0.5702 0.2865 2007Tier 16,429 0.5960 0.3221 Tier 23,674 0.5853 0.3202 Tier 33,011 0.6219 0.3292 2013Tier 110,000 0.5758 0.3001 Tier 26,794 0.5888 0.3359 Tier 35,977 0.5965 0.3281 Growth rate　　　95--02Tier 16.67 -0.31 -0.90 Tier 24.93 0.92 0.17 Tier 33.56 1.42 0.79 02--07Tier 110.10 1.55 1.62 Tier 211.17 1.72 2.70 Tier 37.74 1.75 2.82 07--13Tier 17.64 -0.57 -1.17 Tier 210.79 0.10 0.80 Tier 312.11 -0.69 -0.06 5. ConclusionsPeople’s welfare is often measured in terms of the absolute value of indicators such as the level of income or consumption. However, people often compare themselves with others (“keeping up with the Jones”). If utility is also measured in or consists of relative terms, a small gain in absolute income but a decline in relative position may reduce the person’s welfare, which may increase social tension. This paper evaluates the social tension using four rounds of the China Household Income Projects (CHIPs) data. When using the Gini social welfare function, we found that across the country, the overall level of social welfare increased steadily from 1995 to 2013. However, urban residents have higher income and better social welfare compared with rural residents. The social tension in people with urban Hukou is significantly lower than those have rural Hukou and the migrant population. By region, the social tensions in the Western region are the most severe. However, after 2007, the social tension in the Western region has been declining at a higher rate than that of the other two regions. This shows that the differences in welfare between regions are shrinking. The social welfare of the provinces with the highest GDP per capita growth is much higher than that of the provinces with relatively backward development. Tier one provinces shared most of the economic development results, which implies the divergence of provincial development. As for social tension caused by poverty, we used the 2010 poverty line of 2,300 yuan. We found that the poverty gap ratio and the severity of poverty in urban areas are lower than that of rural residents and migrants, and people with urban Hukou are less likely to fall into poverty. A similar conclusion has been reached using the social tension for relative poverty. The social tension in Eastern China is the lowest while that in Western China is the highest, but the social tension in the Western region is declining rapidly, which shows that the social welfare in the Western region is constantly improving. At the same time, our study also found that the mega-provinces have a greater chance of enjoying social benefits, and the welfare distribution among the provinces is very unbalanced.We estimated social tension due to alienation and polarization, we found that they do not show significant differences between regions and provinces, but social welfare level is higher in regions with better economic development. The uneven distribution of social welfare among different groups of people separated by Hukou (in terms of both rural-urban dimension and regions dimension) is a major source of social tension and is a major concern for the society. With the abolition of the agricultural tax, and the introduction of a basic pension and healthcare system, together with economic development and the relaxation of rural to urban Hukou control, the social tensions in rural areas are declining significantly. However, with China’s geographically uneven growth across regions, the problem with the Hukou system now is less than the rural-urban divide but more of due to regional differences. The variation of the social tension index across regions means that regional unbalance is the great challenge that needs to be addressed. Due to China’s extraordinary economic growth, the poverty induced social tension in Chinese society has been declining. However, the inequality in China has been increasing up to 2012. Given the inequality in China is already one of the highest in the world, China should focus more on addressing the unequal distribution with redistributive policies. Despite the problems, social tension in China is reducing overall. In response to the issues of income distribution and social tension, the Chinese government is making serious efforts to increase the incomes of the poor and to expand the middle class, by balancing efficiency and equality, undertaking redistributive activities, and providing public services to the poor areas. As a result of these polices we can expect a continuing improvement in social welfare. ReferencesBoyce, Christopher J., Gordon Brown and Simon Moore, 2010 “Money and Happiness: Rank of Income, Not Income, Affects Life Satisfaction” Psychological Science, 21(4): 471-475.Esteban, Joan-Maria., & Debraj Ray, 1994. “On the Measurement of Polarization”. Econometrica, 62(4): 819–851.Foster, James., Joel Greer, Erik Thorbecke, 1984, “A Class of Decomposable Poverty Measures”. Econometrica, 52(3), 761–776 Gustafsson Bjorn, Shi Li, Sicular 2008. 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New York: Oxford University Press.Wang, Xiaobing., and Jenifer Piesse, 2013 “The Micro foundations of Dual Economy Models”, The Manchester School. 81(1): 80–101.Wang, Xiaobing., Jenifer Piesse and Nick Weaver, 2013, “Mind the Gaps: A Political Economy of the Multiple Dimensions of China’s Rural-Urban Divide”. Asian Pacific Economic Literature. 27(2):52-67.Wang, Xiaobing., and Nick Weaver, 2013, “Surplus Labour and Lewis Turning Points in China”. Journal of Chinese Economic and Business Studies. 11(1): 1-12.Wang, Xiaobing., Jenifer Piesse, and Zhengmao Ye, 2016 “Labour Markets in China: A Study of Structure and Evolution of Wages”. Frontier of Economics in China. 11(2): 265–301.World Bank, 2017, “GNI per capita, Atlas method (current US$)”, AppendixTable A1. Provinces in the surveyProvince1995　2002　2007　2013　urbanruralurbanruralmigranturbanruralmigranturbanruralmigrantBeijing√√√√√√√√√√　√√√√Hebei √　√√　√　√　√　　　　　Shanxi√√√√√√√√√√　√√√√Liaoning√√√√√√√√√√　√√√√Jilin√　√√　√　　　　　　　　　Shanghai　　　　　　　√√　√　　　　Jiangsu√√√√√√√√√√√√√√√Zhejiang√　√√　√　√√√√　　　　Anhui√√√√√√√√√√√√√√√Fujian　　　　　　　√√√　　　　　Jiangxi√　√√　√　　　　　　　　　Shandong√　√√　√　　　　　√√√√Henan√√√√√√√√√√√√√√√Hubei√√√√√√√√√√√√√√√Hunan√　√√　√　√√√　√√√√Guangdong√√√√√√√√√√√√√√√Guangxi　　　√　√　　　　　　　　　Chongqing　　　√√√√√√√√√√√√Sichuan√√√√√√√√√√√√√√√Guizhou√　√√　√　　　　　　　　　Yunnan√√√√√√√√√√　√√√√Shanxi√　√√√　　　　　Gansu√√√√√√√√√√　√√√√Xinjiang　　　√　√　　　　　　　　　Note: Chongqing is included in Sichuan when the survey conducted in 1995Table A2. Social Welfare and Social Tension by Sectors and RegionsYear　Social welfarePer capital household incomeSocial tension(Gini index)1995Eastern-urban6219 8719 0.2867 Eastern-rural2185 3546 0.3836 Eastern-migrant　　　Central-urban4288 5713 0.2493 Central-rural1839 2576 0.2863 Central-migrantWestern-urban4933 6645 0.2577 Western-rural1481 2156 0.3132 Western-migrant　　　2002Eastern-urban8636 12739 0.3221 Eastern-rural3221 4985 0.3538 Eastern-migrant6592 9814 0.3283 Central-urban6230 8743 0.2874 Central-rural2304 3263 0.2938 Central-migrant4583 7011 0.3464 Western-urban6698 9697 0.3093 Western-rural1869 2680 0.3025 Western-migrant5396 8477 0.3635 2007Eastern-urban14803 22591 0.3447 Eastern-rural4431 7007 0.3676 Eastern-migrant13786 18899 0.2706 Central-urban11105 15344 0.2762 Central-rural3261 4742 0.3124 Central-migrant8647 13179 0.3439 Western-urban9694 14233 0.3189 Western-rural2599 3866 0.3277 Western-migrant10893 16483 0.3391 2013Eastern-urban21023 32701 0.3571 Eastern-rural7921 12895 0.3857 Eastern-migrant12628 20284 0.3775 Central-urban15937 23364 0.3179 Central-rural5510 8745 0.3700 Central-migrant12348 18938 0.3480 Western-urban16508 23782 0.3059 Western-rural4861 7952 0.3887 Western-migrant14385 20493 0.2981 growth rate　　 　95--02Eastern-urban4.80 5.57 1.68 Eastern-rural5.70 4.99 -1.15 Eastern-migrant　　　Central-urban5.48 6.27 2.05 Central-rural3.28 3.43 0.37 Central-migrantWestern-urban4.47 5.55 2.64 Western-rural3.38 3.16 -0.49 Western-migrant　　　02--07Eastern-urban11.38 12.14 1.37 Eastern-rural6.59 7.05 0.77 Eastern-migrant15.90 14.00 -3.79 Central-urban12.26 11.91 -0.79 Central-rural7.19 7.77 1.24 Central-migrant13.54 13.45 -0.14 Western-urban7.68 7.98 0.61 Western-rural6.82 7.60 1.61 Western-migrant15.08 14.22 -1.38 07--13Eastern-urban6.02 6.36 0.59 Eastern-rural10.17 10.70 0.80 Eastern-migrant-1.45 1.19 5.71 Central-urban6.21 7.26 2.37 Central-rural9.14 10.74 2.86 Central-migrant6.12 6.23 0.20 Western-urban9.28 8.93 -0.69 Western-rural11.00 12.77 2.89 Western-migrant4.74 3.70 -2.13 Table A3. FGT Class of Poverty Measures by Sectors and RegionsYear　Headcount ratioPoverty gap ratio Severity of poverty1995Eastern-urban2.79 0.62 0.31 Eastern-rural49.54 18.13 10.25 Eastern-migrant-　-　-　Central-urban9.05 2.12 0.85 Central-rural63.68 22.47 11.28 Central-migrant---Western-urban4.75 1.11 0.41 Western-rural77.00 32.41 17.00 Western-migrant-　-　-　2002Eastern-urban1.20 0.23 0.07 Eastern-rural24.82 8.24 3.99 Eastern-migrant3.73 1.66 1.08 Central-urban3.14 0.73 0.26 Central-rural47.50 14.58 6.38 Central-migrant9.36 3.24 1.85 Western-urban3.59 0.80 0.34 Western-rural60.85 22.20 10.81 Western-migrant6.44 1.99 1.15 2007Eastern-urban0.34 0.08 0.03 Eastern-rural13.65 5.33 8.46 Eastern-migrant0.34 0.18 0.16 Central-urban0.65 0.17 0.08 Central-rural22.69 6.84 3.15 Central-migrant0.36 0.07 0.01 Western-urban0.71 0.18 0.08 Western-rural38.25 12.70 6.08 Western-migrant0.35 0.07 0.01 2013Eastern-urban0.74 1.58 7.89 Eastern-rural4.91 2.93 14.44 Eastern-migrant1.48 1.55 1.65 Central-urban0.69 1.19 6.01 Central-rural9.07 3.96 4.67 Central-migrant1.03 2.78 11.41 Western-urban0.69 1.00 4.81 Western-rural12.31 5.34 18.28 Western-migrant2.15 0.34 0.10 growth rate　Headcount ratioPoverty gap ratio Severity of poverty95--02Eastern-urban-11.38 -13.31 -19.55 Eastern-rural-9.40 -10.65 -12.63 Eastern-migrant-　-　-　Central-urban-14.02 -14.17 -15.37 Central-rural-4.10 -5.99 -7.82 Central-migrant-　-　-　Western-urban-3.93 -4.64 -2.64 Western-rural-3.31 -5.26 -6.26 Western-migrant-　-　-　02--07Eastern-urban-22.37 -18.12 -13.85 Eastern-rural-11.27 -8.35 16.24 Eastern-migrant-38.11 -35.89 -31.34 Central-urban-27.05 -24.83 -20.39 Central-rural-13.74 -14.04 -13.14 Central-migrant-48.00 -54.19 -63.37 Western-urban-27.73 -25.95 -24.92 Western-rural-8.87 -10.58 -10.87 Western-migrant-44.04 -48.51 -58.22 07--13Eastern-urban14.08 62.93 150.07 Eastern-rural-15.66 -9.48 9.32 Eastern-migrant27.91 43.31 46.75 Central-urban1.09 37.56 103.68 Central-rural-14.17 -8.71 6.76 Central-migrant19.39 86.89 212.65 Western-urban-0.40 33.27 97.12 Western-rural-17.22 -13.43 20.14 Western-migrant35.17 29.27 37.39 Table A4. Social Tension Due to Poverty by Secotors and Regions Year　Poverty gap ratioSeverity of poverty1995Eastern-urban0.20 0.29 Eastern-rural13.99 17.39 Eastern-migrant-　-　Central-urban1.02 1.33 Central-rural23.86 28.46 Central-migrant-　-　Western-urban0.46 0.58 Western-rural41.12 45.91 Western-migrant-　-　2002Eastern-urban0.05 0.06 Eastern-rural4.53 5.46 Eastern-migrant0.46 0.56 Central-urban0.23 0.28 Central-rural12.23 14.59 Central-migrant1.26 1.62 Western-urban0.23 0.31 Western-rural22.67 26.18 Western-migrant0.64 0.88 2007Eastern-urban0.01 0.01 Eastern-rural2.08 4.20 Eastern-migrant0.03 0.03 Central-urban0.03 0.04 Central-rural3.95 4.88 Central-migrant0.01 0.01 Western-urban0.03 0.05 Western-rural8.98 10.79 Western-migrant0.01 0.01 2013Eastern-urban0.13 0.20 Eastern-rural0.62 1.79 Eastern-migrant0.21 0.21 Central-urban0.14 0.24 Central-rural1.24 2.04 Central-migrant0.40 0.50 Western-urban0.11 0.21 Western-rural1.84 5.16 Western-migrant0.04 0.06 growth rate　Poverty gap ratioSeverity of poverty95--02Eastern-urban-17.88 -20.02 Eastern-rural-14.89 -15.25 Eastern-migrant-　-　Central-urban-19.23 -19.73 Central-rural-9.11 -9.10 Central-migrant-　-　Western-urban-9.66 -8.37 Western-rural-8.16 -7.71 Western-migrant-　-　02--07Eastern-urban-26.98 -27.07 Eastern-rural-14.38 -5.13 Eastern-migrant-43.76 -42.82 Central-urban-32.83 -31.90 Central-rural-20.24 -19.68 Central-migrant-59.62 -61.53 Western-urban-31.42 -31.78 Western-rural-16.90 -16.24 Western-migrant-54.92 -57.67 07--13Eastern-urban53.19 58.80 Eastern-rural-18.23 -13.26 Eastern-migrant41.63 35.40 Central-urban28.25 33.78 Central-rural-17.56 -13.56 Central-migrant75.93 81.88 Western-urban22.34 28.63 Western-rural-23.23 -11.57 Western-migrant24.66 31.41 TableA5. Relative Poverty Line (40%×medium income)Year　Headcount ratioPoverty gap ratio Severity of poverty1995total18.555.503.53urban3.880.900.40rural7.222.414.902002total17.245.122.25urban6.671.510.56rural8.652.190.95migrant5.312.041.252007total21.377.384.34urban7.701.890.74rural12.274.155.49migrant4.811.210.492013 total14.775.775.40urban10.193.332.35rural12.845.219.57migrant9.233.632.54Growth rateHeadcount ratioPoverty gap ratioSeverity of poverty95--02total-1.05-1.02-6.23urban8.037.635.12rural2.62-1.34-20.9002--07total4.397.6114.05urban2.914.515.54rural7.2413.6142.03migrant-1.98-9.93-17.2207--13total-5.97-4.023.72urban4.789.9321.36rural0.773.879.71migrant11.4920.0631.77Table A6. Social tension due to relative poverty Year　Poverty gap ratioSeverity of poverty1995total5.357.87urban0.500.68rural3.458.512002total3.354.07urban0.560.72rural2.393.13migrant0.901.132007total2.743.57urban0.420.53rural3.206.31migrant0.280.352013total1.231.90urban0.480.70rural2.104.47migrant0.720.96Growth ratePoverty gap ratioSeverity of poverty95--02total-6.48-8.99urban1.800.80rural-5.08-13.3202--07total-3.92-2.57urban-5.82-6.10rural5.9515.10migrant-20.75-20.7407--13total-12.50-9.97urban2.395.03rural-6.73-5.58migrant17.0818.20Table A7. Relative Poverty Line（40%×medium income)-measured by regionsYear　Headcount ratioPoverty gap ratioSeverity of poverty1995Eastern12.38 4.04 3.95 Central7.03 2.23 2.68 Western6.62 1.72 0.88 2002Eastern11.56 3.64 1.74 Central7.92 1.92 0.73 Western8.68 2.31 1.02 2007Eastern16.15 5.66 4.18 Central11.44 3.39 1.57 Western13.19 3.92 1.83 2013Eastern14.40 5.66 4.59 Central14.57 5.54 4.59 Western16.39 6.34 7.58 Growth rate　Headcount ratioPoverty gap ratioSeverity of poverty95--02Eastern-0.97 -1.48 -11.03 Central1.72 -2.13 -16.93 Western3.95 4.29 2.10 02--07Eastern6.91 9.23 19.12 Central7.61 12.05 16.44 Western8.73 11.13 12.42 07--13Eastern-1.89 -0.02 1.57 Central4.11 8.54 19.63 Western3.68 8.36 26.70 Table A8. Social tension due to relative poverty-measured by regionsYear　Poverty gap ratioSeverity of poverty1995Eastern3.04 5.26 Central2.60 5.05 Western2.12 2.97 2002Eastern1.79 2.21 Central1.54 1.93 Western1.96 2.53 2007Eastern1.541 2.235 Central1.494 1.864 Western2.040 2.560 2013Eastern0.960 1.380 Central1.412 2.082 Western1.715 3.014 Growth rate　　　95--02Eastern-7.28 -11.66 Central-7.23 -12.87 Western-1.09 -2.29 02--07Eastern-2.97 0.24 Central-0.55 -0.66 Western0.77 0.25 07--13Eastern-7.59 -7.73 Central-0.94 1.86 Western-2.84 2.76 Table A9. Relative Poverty Line（40%×medium income)-measured by Tiers Year　Headcount ratioPoverty gap ratioSeverity of poverty1995Tier 113.13 4.14 3.76 Tier 29.50 2.87 2.63 Tier 36.68 1.97 1.82 2002Tier 111.68 3.49 1.57 Tier 210.30 2.89 1.32 Tier 38.53 2.13 0.85 2007Tier 115.75 5.61 4.03 Tier 211.65 3.68 1.87 Tier 312.13 3.59 1.64 2013Tier 114.40 5.66 4.59 Tier 216.64 6.66 5.83 Tier 314.73 5.64 5.82 Growth rate　Headcount ratioPoverty gap ratioSeverity of poverty95--02Tier 1-1.65 -2.41 -11.77 Tier 21.17 0.12 -9.34 Tier 33.54 1.13 -10.37 02--07Tier 16.15 9.96 20.81 Tier 22.50 4.95 7.10 Tier 37.30 11.07 14.08 07--13Tier 1-1.47 0.14 2.19 Tier 26.12 10.38 20.92 Tier 33.29 7.80 23.53 Table A10. Social tension due to relative poverty -measured by Tiers Year　Poverty gap ratioSeverity of poverty1995Tier 13.11 5.29 Tier 23.34 5.82 Tier 32.42 4.30 2002Tier 11.72 2.10 Tier 22.31 2.95 Tier 31.81 2.28 2007Tier 11.527 2.167 Tier 21.621 2.054 Tier 31.871 2.321 2013Tier 10.960 1.380 Tier 21.695 2.508 Tier 31.525 2.504 Growth rate　　　95--02Tier 1-8.16 -12.33 Tier 2-5.10 -9.23 Tier 3-4.08 -8.63 02--07Tier 1-2.32 0.59 Tier 2-6.86 -7.01 Tier 30.71 0.32 07--13Tier 1-7.44 -7.25 Tier 20.74 3.39 Tier 3-3.35 1.27 Table A11. Social Welfare and Social Tension Due to Alienation/Polarizationby Sector and RegionsYear　Social welfareAlienationPolarization1995Eastern-urban5279 0.3945 0.2157 Eastern-rural1743 0.5083 0.2493 Eastern-migrant... Central-urban3732 0.3467 0.1947 Central-rural1567 0.3916 0.2106 Central-migrant... Western-urban4305 0.3521 0.1888 Western-rural1242 0.4240 0.2217 Western-migrant... 2002Eastern-urban7170 0.4372 0.2302 Eastern-rural2625 0.4734 0.2393 Eastern-migrant5404 0.4493 0.2420 Central-urban5239 0.4007 0.2266 Central-rural1941 0.4052 0.2229 Central-migrant3722 0.4691 0.2455 Western-urban5566 0.4260 0.2334 Western-rural1565 0.4160 0.2271 Western-migrant4429 0.4775 0.2281 2007Eastern-urban12022 0.4678 0.2463 Eastern-rural3525 0.4969 0.2585 Eastern-migrant12060 0.3618 0.1826 Central-urban9525 0.3792 0.2060 Central-rural2733 0.4238 0.2227 Central-migrant6989 0.4697 0.2516 Western-urban8028 0.4359 0.2341 Western-rural2111 0.4541 0.2528 Western-migrant9139 0.4455 0.2128 2013Eastern-urban17000 0.4801 0.2460 Eastern-rural6197 0.5195 0.2675 Eastern-migrant9878 0.5130 0.2711 Central-urban13120 0.4385 0.2411 Central-rural4399 0.4969 0.2539 Central-migrant10392 0.4512 0.2065 Western-urban13783 0.4204 0.2291 Western-rural3811 0.5207 0.2640 Western-migrant11993 0.4147 0.2334 growth rate　Social welfareAlienationPolarization95--02Eastern-urban4.47 1.48 0.94 Eastern-rural6.02 -1.01 -0.59 Eastern-migrant　　　Central-urban4.97 2.09 2.19 Central-rural3.10 0.49 0.82 Central-migrantWestern-urban3.74 2.76 3.08 Western-rural3.36 -0.27 0.34 Western-migrant　　　02--07Eastern-urban10.89 1.37 1.36 Eastern-rural6.08 0.97 1.56 Eastern-migrant17.41 -4.24 -5.48 Central-urban12.70 -1.10 -1.89 Central-rural7.08 0.90 -0.02 Central-migrant13.43 0.02 0.50 Western-urban7.60 0.46 0.06 Western-rural6.16 1.77 2.17 Western-migrant15.59 -1.38 -1.38 07--13Eastern-urban5.95 0.43 -0.01 Eastern-rural9.86 0.74 0.57 Eastern-migrant-3.27 5.99 6.81 Central-urban5.48 2.45 2.66 Central-rural8.26 2.69 2.21 Central-migrant6.83 -0.66 -3.24 Western-urban9.43 -0.60 -0.36 Western-rural10.35 2.31 0.72 Western-migrant4.63 -1.19 1.55 ................
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