Increasing income disparity in China

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Description:

Although China has done an excellent job of lifting millions out of poverty, there are still concerns about the growing income disparity within the country. The pace of the poor's growing affluence is by far slower when compared with the richer portion of China.

City vs. farm Employed vs. not empployed in the city Caused by growth and migration to cities Results in a multi-level society which could lead to democracy or civil war.

Currently, China is pushing for urbanization as part of its modernization bid. If the rich-poor gap continues to grow,
it will hinder the development of Chinese cities. This will get the below problems
1)A widening gap between the rich and poor in cities may result in a multi- level urban society and cause confrontation between different groups.
2)The problem could breed more unstable factors which could endanger social stability and public security.

Enablers:

  1. Income disparities between different areas and industries: Urbanites and those working in government monopolistic sectors, for example telecommunication and banking, generally earn much more than farmers and city dwellers in non-monopolistic industries.
  2. Discrimination against different social identities: In China today, seldom can farmers gain an equal footing while competing with their urban counterparts in job-seeking. Such discrimination also further pushes farmers to a disadvantageous corner while they try to elevate themselves through other means, for instance education and vocational training.
  3. Large gap between the country's urban and rural areas and between the booming coastal regions and underdeveloped western regions.
  4. Jobless workers and migrant workers.

Inhibitors:

  1. Must give priority to reform of taxation, social security, and more support for rural areas.
  2. Considering collecting high-consumption taxation and legacy taxation as ways to reduce the rich-poor gap by
    the Chinese government.
  3. Measures include building a framework for helping poor citizens and measures to help those unemployed.

Paradigms:

1) Adopted the policy of reform and opening to the outside world.
2) The country's per capita GDP has increased by five times.

Experts:

http://www.mof.gov.cn/index.htm
http://www.mof.gov.cn/english/english.htm

Timing:

The 2008 Olympic Games in Beijing

Web Resources:

  1. People's Daily. 2002. China Urged to Heed Enlarging Income Disparity.
  2. http://www.xinhuanet.com/english/index.htm
  3. http://www.btmbeijing.com/contents/en/business/2005-09/focus/chinaamendtaxlaws
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