Wage Growth, Trade Surplus, and Domestic Development: The China Case, Summer 2014

China has experienced remarkable economic growth since the transformation of its economy in the late 1980s, but its wage growth is comparatively slower. China’s income inequality has simultaneously intensified, which can be observed on many dimensions. Such uneven distribution between urban and rural residents and among individuals in general has a negative impact on consumer demand, which influences China’s trade patterns and economic growth. This article argues that China’s economic growth could be sustained along with growing consumer demand through a narrowing of its income gap and the establishment of a social security network.