The Government Paradox,Monopoly of State-owned Enterprises and Income Gap——An Empirical Test Based on the Characteristics of China's Transformation

Why the income gap has not yet appeared signs of convergence while China has experienced rapid growth for over 30 years since the reform and opening up? Is this caused by economic development,or related to the growth mode of the government-led? The paper explores the reasons from the internal logic of transformational growth which is a growth mode of local government-led,and two of the most prominent characteristics of this mode is local government-led and monopoly of state-owned enterprise(SOEs).The empirical research shows that: The local government behavior not only fails to inhibit the widening income gap caused by market competition,but widens income gap;Monopoly of SOEs has not significant impact on the widening income gap,but administrative monopoly that is the combination of local government and SOEs' monopoly is the mainly institutional reasons leading to the widening income gap.This indicates that the nature of enterprise is not the root reason of income disparities that in essence is the collusion of local government and SOEs,namely the combination of powers and capital.Therefore,to reduce government intervention,to eliminate administrative monopoly can radically curb the widening income gap.