Abstract: Aslower growth of the urban residents’ income gap and the widening ruralresidents’ income gap in 2013 combined to slow down the widening of China’income gap. The main reason for the slower contraction of the urban residents’income gap and the widening income gap of the rural residents was the fall inthe income growth rate of low-income households in both urban and rural areas.Salary reform for executives of state-owned enterprises together with theanti-corruption campaign will significantly reduce the average income growthrate of high-income urban households and urban residents, causing a decline inthe income gap of the urban residents and that between urban and ruralresidents. The income growth rate of low-income rural households will beremarkably reduced by the decline in the farm produce price as economic growthslows down. Therefore, the rural residents’ income gap will continue to widenin the future. In short, as the income gap of urban residents and that betweenurban and rural residents narrow, the general income gap in China will continueto shrink.