A very smart, balanced, readable report, "How Much Inequality can China Stand?" has just been issued by Nick Young at China Development Brief. The report relies on Chinese scholarly and government data to give a succinct summary of some of the key areas of inequality in China today: gender, income (including intra-rural inequality), access to basic services and social protections such as education and health care, exposure to "externalities" such as the effects of urban congestion and pollution, environment and proximity to pollution, and land use deals.
The report argues that market forces are unlikely to create greater income convergence in the short-term, that state involvement is necessary and that it does exist:
...the predominantly urban NGOs that have emerged over the last decade, the “public intellectuals” who have voiced their concerns and the more adventurous media that have reported those concerns, by no means constitute a coordinated, united or oppositional force. There are, to be sure, some angry individuals who denounce abuses in ways that invite confrontation with the authorities. But the characteristic form of civil society advocacy in China is to call on government leaders to “pay more attention” to this or that social issue, to “hear the voice” of this or that social group, and/or to consult more extensively with NGOs, intellectuals, and the general public....The central government has recently introduced a number of social, economic and fiscal policy measures to alleviate rural hardship. It is too soon to judge the effect of these palliatives but they do at least appear designed to address what was, by the turn of the century, beginning to look like a crisis in the countryside.