This study makes an original and significant contribution to the analysis of social inequality in China, showing that the socioeconomic stratification in urban China has been created, maintained, and reproduced by a series of institutional legacies and changes during the reform era. During the three decades of market-oriented reform, China has transformed itself from a desperately poor nation into a country with one of the fastest-growing and largest economies in the world. It has also become, since the early 1980s, one of the world's most unequal societies. Most economic interpretations tend to examine the micro- or individual-level factors in these changes, stressing the increasing importance of human capital in income determination during China's move to a market economy. Calling into question such a standard economic model, Wang Feng uses institutional changes at the societal level to explain changing patterns of inequality among individuals. He makes a fascinating sociological statement that the changing stratification in urban China is a social process driven by institutions and social categories. These categories serve not only as a crucial structural basis for inequalities but also as key institutions for maintaining equalities within their boundaries. According to Wang, the most important among these categories are geographic locales, ownership types, industries, and work organizations (danwei).

Based on longitudinal household and individual-level income and expenditure data covering three provinces (Liaoning, Sichuan, and Guangdong), about thirty cities of various sizes, and more than 2,000 households annually between 1986 and 2000, as well as information collected by personal interviews, Wang documents a complex pattern that embodies increased inequality between social categories and persistent equality within them. Wang's sociological perspective in exploring the underlying forces that determine rising inequality in urban China is deeply embedded in a rich literature with respect to postsocialist Chinese society. Since the 1980s, numerous scholarly studies of China have examined the role of institutional change in defining the emerging political economy, focusing specifically on property rights reforms, the changing behavior of local governments, and the transitional role of work organizations in urban China. The previous research provides a solid foundation for studying China's economic and institutional transformation and for understanding the ways in which these institutional changes have shaped the life chances of Chinese citizens.

Consistent with this line of institutional study, Wang explores why and how the key institutions and social categories mentioned earlier, deeply rooted in China's evolving system of political economy, have been explicit driving forces creating inequality in today's urban China. Wang is the first scholar to integrate these institutional factors with individual characteristics (e.g., gender, education, age, occupational group, and length of employment) and, more importantly, to weave these key institutional factors into a coherent theory explaining the nature of inequality during China's reform era. In addition to its clearly developed theory and well-executed empirical analyses, the book is also well written and concise.

Following a brief introduction to the theory of social categories as structural sources of inequality in chapter 1, chapter 2 addresses the question of which categories account for inequality-generating processes in urban China over the course of reform. Chapter 3 provides a summary of the general economic changes in urban China, documenting both the rising income and standards of living and rising inequality between 1986 and 2000. Chapter 4 focuses on differentiating the effects of social categories from individual factors in creating income inequality and shows the significant roles of categories in this process. In chapter 5, Wang turns to examining the political economy context in which these social categories are formed and maintained. He argues that these categories have been surrounded by insulating boundaries, maintaining a degree of local equality by protecting members within each group. In the concluding chapter, Wang calls for a generalization of his theory in the comparative studies of social inequality. He believes that, despite some unique features in the Chinese pattern of inequality, it is a social fact that boundaries and social categories structure stratification systems in every society.

However, such a strong institutional perspective seems to be weakened by a cultural explanation that, in Wang's analysis, partially accounts for persistent equality within social categories. Wang suggests that the local governments and work organizations seek to curb extreme inequality within their boundaries in order to pursue stability, harmony, and social solidarity. While that might sound reasonable in theory, further research and data are necessary for establishing the connection between the patterns of social inequality throughout the entire reform era and the cultural traditions in Chinese society. Readers need to know to what extent and in what ways these Chinese cultural values shape the social stratification structures. Despite this reservation, Wang's book unquestionably represents a high-quality scholarly study not only in Chinese studies but in the field of social stratification research in general.