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China’s economic reforms starting in the late 1970s have resulted in rapid economic growth, with annual growth in gross domestic product averaging greater than 10% per year for more than 30years. Accompanying this rapid growth in national accounts have been rapid and widespread reductions in poverty. With these reductions in poverty, however, there has often been observed an increase in income inequality, both between as well as within rural and urban sectors. This rising income gap challenges the notion that economic reforms in China have been as successful as the poverty statistics would suggest.