This article by Li Shi features in the World Social Science Report 2016. During the past three decades China’s economic growth has been among the fastest in the world. At the same time the country experienced one of the fastest increases in income and wealth inequality in the world. Since 2008, however, the Gini coefficient measuring income inequality seems to have stabilized and may even have started to decline. This contribution looks at recent data and underlines the policy measures that may explain this new trend.