Income inequality in China has been studied using data from CHNS. By considering income mobility, long-term income inequality is found to decrease over time. The Gini coefficient of long-term income is lower than that of annual income, showing convergence of income levels. Income mobility has reduced long-term income inequality by 24.4% from 1989 to 2011. However, recent years have seen a decline in income mobility, hindering long-term income equalization. To address this, public policies should focus on promoting mobility through reforms and increasing education levels for long-term income equality.