Asia Sentinel - A Rich Country With Poor People

"Many netizens have been thrilled by a news report saying that this year China’s GDP will surpass that of Japan. Some academics even predict that in 20 years, China’s GDP will overtake that of the United States to rank first in the world. The catch is that these glamorous statistics fail to cover up the fact that the rich and the poor are polarized.

A few days ago, Politburo member 蔡繼明 quoted a report issued by the authorities that says presently 0.4 percent of China’s population controls about 70 percent of the country’s wealth – the degree of wealth concentration is higher than in America. In other words, the remaining 99.6 percent of China’s citizens share only 30 percent of its wealth. In terms of GINI Coefficient, China’s figure is already above 0.5 – in Asia she ranks just behind Nepal and the Philippines, and is ahead of all European countries.

The description ‘Cities are like Europe and villages are like Africa’ is perhaps the truest portrait of China’s wealth inequality. Indeed, Chinese cities give the impression of prosperity and affluence: tall buildings everywhere with imposing facades and grandiose décor, plush office buildings, and vast public squares. When one speaks of change, no phrase is more frequently used than 'newer by the day and month' (日新月異).

But in the vast expanse of villages, hordes of peasants still live below the poverty line and they struggle excruciatingly to earn enough to feed and cloth themselves. There is a village in Hebei province named 贊皇縣許亭鄉田村 that’s located 300 kilometers from Beijing. Despite its being called ‘a village of bountiful rice and fish’, there is no lack of men who cannot afford to get married. The reason is that with the meager income from growing crops, a man would have to work for 200 years before he can earn enough to get married. Compared to the cities’ 'newer by the day and month', the villages can only be described as lifeless.

Yet, according to official statistics, those living below the poverty line are only of an insignificant minority: only a few tens of millions. The fact is that the criteria used by the authorities to define poverty line are far below those used internationally. For example, Guangdong already ranks the world’s 14^th in terms of GDP, but then it still uses 750 Renminbi per capita, which is the national figure, as its poverty defining line. And so, the province’s poverty line is lower than that of Vietnam by 20 percent and that of Mongolia by 55 percent. Using such a low standard, no wonder it seems there are not many poor people in China.

The extreme concentration of wealth has given rise to a Chinese-style oligarchy. The oligarchs, through a system of government-entrepreneur collusion and special privileges, have amassed unequal wealth. They carry numerous passports and their assets are spread around the world, having meticulously planned for a later retreat. According to statistics, the number of China’s billionaires is second only to that of the United States. China is also a country that has recorded the fastest growth in luxury goods sales in the world. The degree of profligacy of the wealthy Chinese has indeed stunned many Europeans and Americans.

On one side there is hunger and destitution, while on the other there is reckless squandering and extravagance. The gap between the rich and the poor is so abysmal that any chance of closing it seems remote. Those oligarchs who got rich through corrupt means are particularly loathed by the poor majority. In recent years, this kind of ‘hate-the-rich’ mentality has steadily spread in society and generally reflects people’s reactive mood.

Polarity of the rich and the poor has plunged the entire society into an agitated mental state – a small spark is enough to ignite a big fire. The recent incident in Hangzhou where a rich youngster killed a university graduate pedestrian while speeding in his race car is one example. As a developing nation, China has accumulated enviable wealth by world standards. But its ordinary citizens’ livelihood is similar to that in African countries. There is little to be boastful about."

mr
written by miller , June 26, 2009

This comes as a shock, but I agree the elite of other countries tend to hoard their money overseas more than the chinese elite, hence the rapid economic growth of China. China still punishes even the highest members of politics and business with the death penalty for corruption, and though I am against the death penalty, can see that the corruption would be even more rampant without it. Maybe it's the inveterate gambling nature of the Chinese..

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written by Wahaha , June 25, 2009

here is the report :

http://www.bcg.com/publications/files/Banking_on_China_Successful_Strategies_May06.pdf

.... For example, the wealthiest 0.4 percent of households in China own more than 60 percent of the country's total PERSONAL wealth ......

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written by Wahaha , June 25, 2009

Lol,

First, let us get fact straight.

Here is the newest list of billionaires by Forbes :

http://www.forbes.com/lists/2009/10/billionaires-2009-richest-people_The-Worlds-Billionaires_Rank.html

Try to find a chinese billionaire from mainland on top 200.

2nd, does the wealth mentioned include state-owned banks, steel plants, etc ? obviously not. and we all know in "ideal" world, those most profitable industries are all owned by private. (BTW, China bank now is the most profitable bank in the world.)

3rd, according to 2006 Swiss bank report. India had 1.456 trillion dollars of black money in Swiss bank, Russia had 470 billion dollars of black money, England had 390 billion and China had 96 billion.

http://resources.alibaba.com/topic/288746/Black_Money_in_Swiss_bank.htm

Anyway, it is a big problem, it is bad. China recently put on some measurements to tame the corruption. We will wait to see if it works.

Can someone give CONSTRUCTIVE suggestions that would make things better ? Under the system of "freedom", those enterprises would be owned privately. would that make things better or worse? (see Russia in 90s and India.) Imagine what wouldve happened to the huge amount of money China banks has made in last 10 years under your utopical system ? who would the money belong to ?

There are lot of bad things in China, we dont like them, we want to get rid of them. Please kindly give us some CONSTRUCTIVE suggestion that would make things better, AND BACK YOUR ARGUMENT BY FACTS to prove your idea would make things better. No1 want to see China back to Mao's era (which would eliminate the corruption), right ?

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