Class structure and income inequality in transitional China

Abstract

AbstractIntegrating Kornai’s concept of coordination mechanism and Weber’s types of domination, the author argues that, based on the different property rights embedded within the state power structure, bureaucratic and market coordination define class positions in bureaucratic domination by virtue of authority and in market domination by virtue of market capacity. Class relations are defined as relations of domination and economic interest distribution. A class framework composed of 16 class positions is constructed in terms of authority or market capacity in dual domination. The seven-class scheme generated by aggregation of the 16 class positions fits well with a four-cluster model estimated with latent class analysis of the 2010 CGSS, suggesting that the proposed framework is empirically relevant. The statistical findings also show that, compared to advanced industrialized societies, China has a larger proportion of command classes, a relatively equal share of new and old middle classes, and a smaller working class. China has significantly more farmers, especially in the central and western regions. The class structure is olive-shaped in the eastern region but “圭” (gui)-shaped in the central and western regions. The proposed class scheme can significantly predict income inequality, supporting the argument that class relations have the character of a “domination-interest duality.”