Economic inequality has increased greatly in China since the end of state socialist industry and collective agriculture, but the story of inequality is much more complex than just the rural–urban and coastal–inland dichotomies or the relative contributions of inter-regional and intra-regional inequality. Even within inland rural areas, inequality between villages and within villages has also increased greatly. In 2005–06, we were fortunate to be able to work with the Sichuan Nationalities Research Institute to re-survey 90 per cent of 300 families in three villages that we had originally surveyed in 1988. On the basis of these surveys and of ethnographic information, we found that income inequality had increased quite dramatically in all three villages. In structural terms, the primary reason for this increase was the shift from labour power to small-scale capital as the primary source of family income, a shift that occurred differently in each village.
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