March 9, 2012

China Says Wealth Gap Too Great

Country at risk for social unrest, says Politburo member

The wealth gap in China, which has been growing along with its roaring economy, has exceeded the point beyond which lies social unrest, according to a member of the country’s Politburo.

Bloomberg reported that Bo Xilai, the Communist Party secretary for Chongqing Municipality, said that the Gini coefficient, which is an index of the income gap, has passed 0.46. The range of the coefficient is from 0 to 1, and 0.4 is considered the dividing line beyond which social disturbances are more likely to occur.

Bo spoke at a meeting held during the annual National People’s Congress in Beijing that emphasized steps being taken by his municipality to cut the gap between rural and urban incomes during the last five years while he has been in office. Bo has reintroduced Mao-era philosophy in an attempt to reinvigorate the spirit of a country that at least nominally follows Marxist principles.

He was quoted saying, “As Chairman Mao said as he was building the nation, the goal of our building a socialist society is to make sure everyone has a job to do and food to eat, that everybody is wealthy together. If only a few people are rich, then we’ll slide into capitalism. We’ve failed. If a new capitalist class is created then we’ll really have turned onto a wrong road.”

Protests in the village of Wukan over land grabs by party leaders led to those leaders being expelled from office and also to elections. Suach unrest and corruption are the sorts of events China wants to avoid, but they are becoming far more common.

Sun Liping, a professor at Beijing’s Tsinghua University, was cited as saying that riots, strikes and similar public unrest have doubled from 2006 to 2010 as the gap in income increased. And a 2008 report by Chen Jiandong at Southwestern University of Finance and Economics in Sichuan said that the Gini coefficient stood at 0.302 in 1978, which was when the Communist Party began to open the economy.

Murtaza Syed, resident representative in Beijing for the International Monetary Fund, cited World Bank data showing that China’s Gini coefficient and its wealth gap have both risen more than any other Asian economy in the past 20 years.

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