Fan Di: The Chinese People Really Aren’t as Wealthy as they Seem

Observers of China’s economy shouldn’t focus on sky-high real estate in Beijing. China has many rich people — but the distribution of wealthy is badly skewed, writes Fan Di.
Fan Di: The Chinese People Really Aren’t as Wealthy as they Seem
A man rides a bicycle at an abandoned industrial area of Houjie town in Dongguan on Jan. 27, 2016. Lam Yik Fei/Getty Images
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After 35 years of rapid economic growth, China’s economy has significantly decelerated in the past couple of years. What used to be double-digit growth has dropped to between 6 to 7 percent, a nearly 50 percent reduction. Many people point to China’s weak internal consumption. However, the real problem is the rigid wealth distribution system.

Ailing Consumption

Investment, consumption, and exports have long been the troika of China’s economic growth. However, despite the fact that consumption has somewhat increased in the past couple of years, investment and exports have accounted for larger shares during the past twenty plus years before 2011, while consumption was relatively weak. Especially in the 10 years after 2000, consumption as a share of GDP, continued to decline from 46 percent in 2000 to 34 percent in 2010.

Chinese construction workers at work in Central Beijing on Jan. 20, 2015. (Kevin Frayer/Getty Images)
Chinese construction workers at work in Central Beijing on Jan. 20, 2015. Kevin Frayer/Getty Images