Income Differences between Minorities and Han-Chinese: Discrimination or structural problems?

Abstract: When looking at the Chinese society, it becomes visible that it is made up of over 56 ethnicities, of which 55 form minority groups. Data shows that members of these ethnic minorities have a lower income than individuals belonging to the majority and this gap doesn’t seem to be closing. The aim of this thesis is to investigate what causes the income inequalities and if it is a problem of discrimination or structural problems like geographical endowments. By analyzing data from the CHIP 2007, the question of this cause should be answered. In conducting regression analyses the impact of different factors on income can be reviewed and considered. The results show that geographical conditions and matters of decentralization play a much bigger role than the ethnicity itself and the minority status. A case study looking at a development project initiated by the World Bank shows that by building infrastructure and access to tourism, remote villages in South China have a chance to preserve their natural and cultural heritage while profiting from an increase in tourism. It provides a practical example for the implications from the previous empirical analysis. Finally, the paper gives some important implications about income inequalities in China, namely that they are caused not by discrimination itself according to the findings but due to spatial characteristics.