Chinas Growing Inequality

1
Chinas Growing Inequality

• Rural China Education Foundation
• Retreat 2007
• New York, NY

2
Orient Excess

• China's new breed of millionaires is all about
  luxury

3
China The Big Boom

• China has the second-largest economy in the world
• Home to 500,000 millionaires
• Chinas GDP per capita in 1986 770
• Chinas GDP per capita in 2006 14,040

4
China The Growing Gap

• Wealthiest 20 owns more than 50 of Chinas
  assets
• Poorest 20 owns less than 5
• Income ratio (urban rural) in 1985 1.85 1
• Income ratio (urban rural) in 2005 3.2 1
• Gini coefficient 0.48 approaching 0.5

5
Gini in a Bottle

• Gini is an index that measures a countrys income
  inequality
• 0-1 0 being completely equal, 1 being totally
  unequal
• 0.4 is the danger zone

6
Worldwide Gini
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The Orient Excess

• There is insane excess amongst Chinas wealthiest
• There is an alarming gap between Chinas rich and
  poor, and the poor are left behind

Lam Sai-Wing of 3-D Gold in his golden bathroom,
estimated at 3.4 million
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Point of Discussion 1

• How did the inequality between the rich and the
  poor progress to such a large scale?

• Let some people get rich first Deng Xiao
  Ping, 1985

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Points of Discussion 2

• Is inequality such a terrible thing?

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Inequality Drives Growth

• Price scissors 1950s 1970s
• Price of agricultural product kept artificially
  low, price of goods needed for agriculture are
  raised
• Purpose to bolster urban economy
• 97 billion
• Migrant workers
• 150-200 million migrant workers providing cheap
  labor for needed services in cities
• Land acquisitions
• In 2005, 40-50 million rural people lost part or
  all of their land due to government
  expropriations.

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Point of Discussion 3

• Inequality is actually necessary for growth!
  Agree?

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Point of Discussion 4

• Adelman and Robinson As agrarian societies
  become industrialized, income inequality
  inevitably deepens in the early stage of economic
  development.
• Should the government step in and do something
  about the inequality? OR should everyone just sit
  tight and wait for the inequality to correct
  itself?

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Inequality Beyond the

• Access to medical services
• Access to education
• Legal protection
• Access to social services
• Political power
• Rural protests 87,000 in 2005

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Point of Discussion 5

• Are these inequalities a price of Chinas
  booming growth?
• What can be done about this inequality?

15
The Orient Excess

• Up to 300 buses stop here daily to see Lams
  dazzling golden restroom. The irony, apparently,
  is lost on them After decades of poverty and
  famine, a toilet, of all things, has become the
  symbol of hope and prosperity in the unstoppable
  new China. The only question is What next?

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Points of Discussion

• Is the growing inequality bad?
• Inequality is actually necessary for growth!
  Agree?
• Should the government step in? OR should everyone
  just sit tight?
• Are these inequalities a price of Chinas booming
  growth?
• What can be done about this inequality?