China’s income inequality has reduced at a lower pace in 2013，which is primarily caused by slowing rate of the decreasing urban residents’ income inequality and widening rural residents’ income inequality. This phenomenon can be attributed to lower growth rates of the low income households in both urban and rural areas. The wage reform for managers in the state-owned firms and the government’s anti-corruption campaign will make the expansion of high income households and the increase rate of per capita income of the urban residents decelerating，which will keep the income inequality of urban residents and the per capita income gap between urban and rural residents at a downward trend. The decreasing agricultural product price causing by slowing economic growth will lower income growth rate for the low income households in rural area，which will cause the raising of the income inequality in rural area. In one word，the income inequality will decline in China，which is determined by the decreasing income inequality among urban residents and the narrowing gap of per capita income between urban and rural residents.