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In contrast to reports of 130 billionaires thriving in China, and a claim by the regime that the GDP grew 8.7 percent over the past year, China’s Director of Statistics reported that 150 million Chinese are still living in abject poverty. The widening gap between rich and poor has prompted warnings of potential social instability and chaos.
Director Ma Jiantang of the National Bureau of Statistics gave the report at a press conference on Jan. 21. He also recognized the widening gap between urban and rural residents, and noted that China’s per capita GDP still ranks in the 100’s when compared with the rest of the world.
Economics Professor Xia Yeliang of Peking University, in an interview with Sound of Hope Radio, said “There are severe flaws in the income allocation structure” in China. Ten percent of the population is living on a dollar a day—the U.N.’s poverty threshold.
Yet the net worth of China’s 130 billionaires is second only to that of the 359 billionaires in the U.S., according to a recent study published on huren.net, a Web site dedicated to the lifestyle of the rich in China. There are also 825,000 people with a net worth of over US$1.5 million. Moreover, China’s consumption of luxury goods is increasing—from US$8.6 billion to US$9.4 billion in the past year.
Economist Liao Cheng thinks the gap between rich and poor is widening as a direct result of government monopolies, where officials use their power to exploit citizens. “Many in China have become rich this way,” he said.
Liao also points to the lack of freedom of the press as a contributing factor. “The officials can do whatever they please, as the public's complaints are no threat to them at all.”
Government spending has increased by more than 100 billion yuan (US$14.6 billion) per year since 2005, according to data from the Ministry of Finance and the National Bureau of Statistics.
Professor Ping Xinquiao of Peking University offered another perspective: the total income of the common people (excluding migrant workers) is less than 20 percent of the GDP, while government administrative spending is 30 percent of the GDP.
Information published by the World Bank shows that China's Gini coefficient, which measures income allocation distribution, has reached 0.47—far exceeding the internationally recognized warning level of 0.4. A Gini coefficient of 0.5 would be indicative of a potential for social instability and chaos.
China's official economic policy has been to “allow some people to get rich first.” Under this policy, there is now a huge class of nouveau riche, many of whom are Chinese Communist Party (CCP) officials and their relatives. This has led to charges that official corruption has contributed to the income gap.
On Jan. 12, at the 5th plenary session of the Central Commission for Discipline Inspection, regime leader Hu Jintao vowed to punish officials who perpetrate corruption.
Although for several years running a policy of compulsory registration of wealth of government officials has been raised at the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference, it has always failed to pass. There was no mention at all of this so-called “Sunshine Law” during the 4th Plenary Session of the 17th Central Commission of the CCP last September. Analysts often describe the two congresses as toothless.
A recent survey by the state-run People's Daily and People's Net showed that the issue of government corruption ranked above other hot-button issues such as housing, expenditure control, health insurance, and the wealth gap.
News commentator Chen Pokong told Radio Free Asia, “Loud words, little action. This is typical of the central government. Not only do they lack the determination, they also have no intention to fight corruption at all. A year ago, a survey showed that 90 percent of the public wanted the government to require officials to publicize their wealth, but 97 percent of the officials were against establishing such a requirement.”
Read the original Chinese article.