The study adopts a mixed‐methods design with quantitative and narrative accounts of inequality formation in Hong Kong, Japan, Macau, Singapore, South Korea, and Taiwan. Imports from China, but not elsewhere, have a strong positive impact on domestic income inequality. With growing volume of cheaper imports, local industries lose competitiveness or even relocate to China in some cases. This paper suggests manufacturing employment as one of the causal pathways from Chinese imports to rising income inequality, as the wage gap between the top and bottom widened following the loss of middle‐wage manufacturing jobs. Copyright © 2021 Crawford School of Public Policy, The Australian National University and John Wiley & Sons Australia, Ltd.