BEIJING—China's State Council, the nation's cabinet, said Wednesday that it has established a body to coordinate the creation of policies aimed at narrowing the nation's income gap, more than a year after Beijing first revealed a blueprint for addressing growing inequality.

In a sign of its importance, the group will comprise mostly vice ministers from all major ministries and led by the National Development and Reform Commission, the country's top economic planning agency, the State Council said in a statement dated April...