To make everything worse, Chinese citizens are divided, by the residence registration (hukou) system, into urban and rural residents, with urban residents enjoying superior public services to rural residents.

The solutions to these problems are evident. Human-oriented comprehensive reform is needed, which should include higher wages, better people-related services, and removing the barriers that create inequality and restrict human development.

In other words, different social groups should be allowed to share the fruits of economic development together, so that they continue making joint efforts toward further development.

Chang Xiuze, a senior professor at the Institute of Macroeconomics under the National Development and Reform Commission

Inequality gaps need narrowing

The past 10 years has seen the property gap rapidly grow in China. From 2002 to 2010, the nation's Gini coefficient expanded from 0.54 to 0.73. During this time the rural Gini coefficient expanded from 0.45 to 0.71, while the urban Gini coefficient expanded from 0.45 to 0.66.

In addition, in 2002, the poorest 10 percent of the population owned less than 1 percent of property. By the year 2010, it was below zero because the poorest people were in debt. Meanwhile, the property ownership of the richest 10 percent has increased from 40 to 64 percent.

China belongs in the 10 percent of members of the Organization for Economic Cooperation and Development with the largest social gaps. Worse, the widening trend continues, and China might move higher in the rankings.

The worsening social inequality has much to do with housing prices, which have risen by 25 percent annually for the last 10 years. Without this, the urban Gini coefficient would have been 0.57, according to our estimate.

Another essential factor is the unfair income distribution, which, even according to official statistics, is still quite high. Studies show that the high-income group owns 30 percent of China's property while the low-income group owns 3 percent. That is to say the property ownership gap and the wealth gap are mutually enlarging.

Worse, the government's policies are struggling to redistribute wealth more fairly. Simulations suggest the current policies help shrink the income gap by about 10 percent. The average level for OECD economies is 40 percent, while for certain countries with better welfare policies it is even higher.