Economic Causes and Cures of Social Instability in China John Knight* Abstract China’s leaders have often expressed concerns about social instability, viewed as a threat both to the political order and to continued rapid growth. Slower growth might, in turn, further undermine social stability. Using survey data, the present paper examines the economic determinants of social instability. Four main determinants are identified: past and expected growth of income, income inequality, economic insecurity and misgovernance. The paper then considers possible policies to reduce social instability, examining each of the determinants in turn. Key words: China, economic growth, economic policy, governance, inequality, insecurity, social instability
JEL codes: O15, O20, O43, P26