Abstract: Economic opening can affect income distribution in two ways: Stolper-Samuelson effect can narrow the urban-rural income gaps and technological progress induced by economic opening can expand the income gaps. In this paper, we divide economic opening into trade opening and foreign capital opening and then do empirical study using inter-provincial panel data, and find that there exists an U-shape nonlinear relationship between China’s economic opening and urban-rural income gaps. Fortunately, most regions in China’s lie in the left side of U-shape, therefore economic opening can narrow China’s urban-rural income gaps