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China Needs Cut to Inequality for Common Prosperity: PBOC’s Cai

  • PBOC adviser calls for Gini coefficent to fall below 0.4
  • Goal requires more government redistribution, service spending
General Views of Financial District in Beijing
Photographer: Yan Cong/Bloomberg

China needs to cut its Gini coefficient, a measure of income inequality, to under 0.4 in order to achieve common prosperity, an adviser to the country’s central bank said.

The Gini coefficient should be lowered from its current level of 0.47 to close to 0.4 by 2025 and then toward 0.35 by 2035, according to Cai Fang, a member of the People’s Bank of China’s monetary policy committee.