Abstract
All documents point to one fact that rent-seeking activities represented by tax dodging, smuggling, and corruption have been pervading in China and greatly influenced the income inequality in urban and rural areas, provoking general criticism from all walks of life. This chapter aims to present a general picture of some major rent-seeking activities and make a rough estimation of how they influence income inequality of total resident as well as income inequality of urban and rural resident. Tentative economics explanations for the origin and expansion of rent-seeking in China will be given.
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Notes
- 1.
The case value in 2000 was 35.52 billion yuan, much bigger than other years, mainly because the notorious Yuanhua smuggling case in Xiamen Province was broken. For this purpose, hundreds of staffs and policemen from the Customs throughout the country were deployed and 30 cases were reported and investigated involving 26.4 billion yuan, of which the sum of tax dodging was 13.19 billion yuan.
- 2.
For detailed information on such cases, see Li Xueqin and Li Xuehui (1999).
- 3.
For instance, Yin Guoyuan, former Deputy Director of Shanghai Property and Land Administration, accepted bribes of 36.71 million yuan in his term, and another 8.12 million yuan was of unknown origin. He was reportedly to have 30 sets of houses with each worth more than 3 million yuan, totaling 100 million yuan. It was reported that more properties under his name were not discovered.
- 4.
The method he used for estimation can be expressed in the formula of \( R = \Delta P \times Q = (PM - PP) \times Q \); herein, \( R \) refers to value of some rent, \( \Delta P \) refers to per unit price spread of some resource, which is equal to the difference between the market equilibrium price \( PM \) and posted price \( PP \), and \( Q \) refers to the quantity of unified distribution of the resource.
References
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Zhou, Y., Qin, Y. (2012). Impact of Rent-Seeking on Income Inequality. In: Empirical Analysis on Income Inequality of Chinese Residents. Gu Shutang Academic Fund of Economics, vol 1. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-24952-5_6
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DOI: https://doi.org/10.1007/978-3-642-24952-5_6
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