OP/ED: Chinese Regime Facing Open Revolt Due To Wealth Gap In 5 Years

China, the World's most populous nation, is heading for a revolt within 5 years if its wealth disparity is not addressed according to some economists. It is widely known that China's economy is booming, and has done so for the last decade. But it is not widely known that the wealth gap between the countries rich and poor is greater now than before the Communist Revolution in 1949.

The leadership in Beijing is deeply concerned there could be a wider backlash, threatening a decade of strong economic growth and the Communist Party's grip on power, says Wenran Jiang, a China expert at the University of Alberta.

"They have come to the conclusion that ... the regime will not survive if they don't address the growing wealth gap, and more importantly, the perception that the government only cares about economic growth and the urban rich," he said.

The newspaper of the Communist Party's premier cadre training ground, the Central Party School, reported recently that the wealth disparity had reached the "yellow" warning level and could become a "red" danger within five years.

"Social contradictions" are on the rise, it warned.

Reuters

Just 20 years ago China had virtually no income gap, now it has the World's largest. The major wealth disparity occurs between rural and urban Chinese with city dwellers' average earnings 3 times that of their rural counterparts.

Average urban incomes last year were 9,400 yuan while rural income was 3,000 yuan

China's wealth gap reaching critical level

For a country who's government's very existence sprang forth from the rich/poor divide between farmers and city folk, this disparity has the potential to unseat the regime. Ironically it was poor farmers who allowed Mao to bring communism to China. They were also intended to be the driving force behind the whole of China's economy. But since Deng Xiaoping came to power after Mao's death in 1978, he instituted massive market reforms and sent China down the path it now finds itself in: booming economy and alarming wealth disparity.

To best illustrate the severity of China's wealth gap, the Gini coefficient is needed. The Gini coefficient is a mathematical formula used by economists to illustrate the wealth distribution of a nation. A Gini coefficient of 0 is perfect wealth distribution (every citizen has the same wealth) whilst a Gini coefficient of 1 is complete inequality (1 citizen owns the entire nations wealth).


Image from wikipedia.com

The Gini coefficient for China recently surpassed the internationally accepted warning level of 0.4 and now stands at 0.464. Economists agree that the Gini coefficient is the best single measure of unrest in a nation.

To highlight just how bad the wealth inequality in China is have a look at the following charts.



Images from wikipedia.com


At a glance

United States Gini coefficient: 0.45
Source

United Kingdom Gini coefficient: 0.368
Source

Australian Gini coefficient: 0.352
Source

Israeli Gini coefficient: 0.355
Source

Swedish Gini coefficient: 0.25
Source

Japanese Gini coefficient: 0.249
Source

However, the income disparity also extends between the urban citizens as well. The richest urban income group currently earns 10.7 times that of the poorest urban income group.

According to the Guangdong newspaper Yangcheng Wanbao, a recent survey held by NBSC revealed that similar to the large gap in incomes between the country's urban and rural areas, a sharp gap in incomes among urban citizens now also exists. The highest-income group in cities earns 10.7 times more than those at the other end of the scale.

Epoch Times

If China is to combat its runaway wealth inequality it will have to implement a higher tax on the richest citizens and a lowering of those on the poor. As well as maximizing the employment opportunities for all its citizens. If any country is capable of such measures it is China due to its rigid social, economic and political controls.

Failing that, the Gini coefficient dictates that civil unrest will occur. In a nation of 1.2 billion people that will not be a minor occurance. The challenge to America's superpower status could evaporate if China broke apart due to vast wealth inequality. And China would break apart because of this due to it being a Communist country. Capitalist countries are based on the premise that people will earn more than others whilst Communist countries are the complete opposite.

It's ironic to me that all the United States has to do destroy the Chinese threat to its dominance is continue to invest and buy from China. That is fuelling China's collapse faster than any war or concerted propaganda campaign ever could!

Related News Links:
today.reuters.com
www.cnn.com
www.freep.com
english.epochtimes.com

[edit on 11/10/05 by subz]

Bloody brilliant subz. Thank you.

Very informative. Interesting comment:

"It's ironic to me that all the United States has to do destroy the Chinese threat to its dominance is continue to invest and buy from China. That is fuelling China's collapse faster than any war or concerted propaganda campaign ever could!"

However, IMO - the real 'wars' today are not being waged between nations, but rather, between colossal corporations. And yes, they are divvying up the planet, and arm wrestling over nations with GDP's well under their quarterly posted profits. ...So framing this situation as a US versus China for world dominance kinda misrepresents the real issues. IMO.


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Outstanding work Subz!

I've been in countries where over 98% of the nations wealth was controlled by only 2% of the population and I can attest first hand that massive unrest was present. I remember writing my wife once to tell her I thought a revolution of some sort might be imminent.

Who measures these things on a regular basis and how do they go about it? I don't like to ask questions like the above, but I'm sleepy right now and you've already done the research, so how about a link(s). (I'm assuming it is the cia factbook.)

[edit on 11-10-2005 by Astronomer68]

Nice layout subz.

I'll add, the new China that will emerge in the next decade may not be the one that capitalists and economic experts expect. The coming China revolt will be comprised of workers and peasants, which can emerge and transform the world into a democratic socialism based empire.

For Chinese, Peasant Revolt Is Rare Victory
Farmers Beat Back Police In Battle Over Pollution

great work subz...

the fact I found disconcerting is that the US is at exactly the same place as china regarding income...
that is a statement of suckidness that knows no bounds... and says alot about what has really been going on in the US for the last several decades...

would this formula mean the same for America? are we at a point of revolt or revolution? the poor masses overcoming the elite?


also notice what the index was for Venezuela (recently changed government)
just slightly higher than we are...


[edit on 11-10-2005 by LazarusTheLong]

Thanks guys!

It really does fascinate me that such an event can occur. It reminds me of that girl from Charlie and the Chocolate factory who ate so much of that candy that she burst.

Who'd of thought China's rapacious appetite and expansion would lend the other World powers' a giant killer solution? They feed it, and feed it, until it groans under its unevenly distributed weight. In a similar fashion the same thing occurred in the USSR. With glasnost and perestroika the population got a taste of the true wealth inequality in their supposed communist country, they didn't like it.

Its such an elegant way to kill off a communist country with its toe in international markets. You even make money from the investment!

[edit on 11/10/05 by subz]

This is what happens to activists in China. Those who would rectify such disparaties.

Activist Lu Banglie was taking a journalist into a village known for its budding democracy movement when their journey was brutally halted by a group of men

They pointed flashlights at us, and when the light hit Lu's face, it was as if a bomb had gone off. They completely lost it. They pulled him out and bashed him to the ground

Link


[edit on 14-10-2005 by Nerdling]

I am honored to have been invited to comment, mr subz, and sadly I'm not an economic expert and bodebliss one journalists bad luck doesn't account for any economic problems whether imagined or otherwise.

Even though I am not an economist I'll try, the institution of Market reforms allows China a faster and more flexible economy which beats the more sluggish Central Planning economy known so well to the USSR.

And yes there is a wealth desparity, but I doubt that just because certain citizens have more wealth it doesn't mean that there's going to be a revolt. Considering that if the wealth was gained because you deserved such wealth and use such wealth effectively to help the people then there's no problems.

As it is there's no tax on agriculture and billions of dollars is invested into the country side each year. However, there is the possbility that what you say is true subz and rest assured the goverment is doing what it can to fix the problem, here's one of your own sources to prove it.

"As part of its effort to gradually slow the rapid economic growth seen in 2004, Beijing says it will reduce somewhat its spending on infrastructure in 2005, while continuing to focus on poverty relief and through rural tax reform." www.cia.gov...

(btw there appears to be an error with ym link and its causing the whole rest of the post to become a link I not know how to fix)

Also then there's the matter of demographics there's some 350-400 million people with a labour force of some 760 millions, most of that 700 million lives in the country side where there are far less high paying jobs and most families work as part of a agricultural company, collective farm or a private plot.

Now another problem wiht rural profit is that China needs food but vegetables and fruits make the most funny but grow the least while wheats and other such plants grow the must abundant, in order to feed ourselves we do what we must to balance it, must families may not have 5 tv's and 6 computers as in some canadian or american families but they live an okay living.

I'll have to double check my sources to confirm this. I tend to read from a second and third opinion from foreign books.

[edit on 12-10-2005 by The Middle Kingdom]

Originally posted by The Middle Kingdom
I am honored to have been invited to comment, mr subz, and sadly I'm not an economic expert and bodebliss one journalists bad luck doesn't account for any economic problems whether imagined or otherwise.

Thank you for taking the time to reply to my Op/Ed. Your thoughts are most welcome and I am glad you shared them with us.

With respect to the abolishing of taxes for farmers, do you see a higher system of taxation being placed on the rich?

Do you see parallels between China's and the United States wealth inequalities? The United States Gini coefficient is practically the same as Chinas but President Bush has instituted tax cuts for the richest Americans. If China does increase its taxes on the rich, and it worked, would that not be a highly embarrassing scenario for Washington?

[edit on 12/10/05 by subz]

Its not just a matter of raising the taxes of the rich, its also a matter of how the budget is balanced between helping the poor and helping industries flourish.

Since most citizens who'ld be considered rich are those reinvesting a vast amount of profit back into the economy, and money recieved from the trade surplus.

As for parallels, there is some similarity but also a wide gap because America is deliberately trying to widen the gap, the People's Republic of China is trying to shorten it but recent economic growth is hard to slow down and redirect to helping the poor.

Also there's the matter that a large percentage of China's population is rural in nature with however a large increase in urban growth but America is mostly urban with government subsidized/corparate farms.

I could be wrong, is there any sources to confirm the American percentage of rural farmers and urban spral?

Back to China's rural farmers, as I said no agricultural taxes and government investment is a big help, but rice primarily being a labour intensive crop requires many workers to farm it and the wages earned or profits earned are small in comparrison to fruit and vegetable farming which is more mechanical in nature and provides a far greater yield of personal profit for the average farmer but... doesn't supply as much food, and as we know with 1.2-3 billion people China has alot of mouths to feed, we could feed ourselves but it'ld be hard and thus we are forced to import food for the sake of living conditions.

As for America if America keeps bastardizing (right word?) its poor and abusing them delliberatly I see either a large growth in independant parties or some more democrat presidents and possibly large cuts to the military.

Also if the PRC manages with its 11th 5 Year Plan "next five years to persist in putting people first, change the concept of development, create a new development mode, improve the quality of development, carry out the "five balances" (balancing urban and rural development, development among regions, economic and social development, development of man and nature, and domestic development and opening to the outside world)" to change the development mode to something more benfitial to the rural areas then I see Washington going to become very embarrased if the "ChiComms out did them" and some politicians probably tarred in feathered which I'm surprised that the West does such things to its leaders, I hope its a figure of speach.

As for America delliberatly trying to upset the Chinese people by investing in us, I seriously doubt that considering the incompetence in recent US leadership and the fact that your whole global strategy seems to change every 4-8 years.

This site is in English to help you Americans, British, and Canadians, Australians and other english speaking peoples.
sources: english.people.com.cn...



[edit on 14-10-2005 by The Middle Kingdom]

Originally posted by The Middle Kingdom
Its not just a matter of raising the taxes of the rich, its also a matter of how the budget is balanced between helping the poor and helping industries flourish.

Since most citizens who'ld be considered rich are those reinvesting a vast amount of profit back into the economy, and money received from the trade surplus.

Doesn't that place the Chinese government in a position of faith? Faith in believing that the rich will infact reinvest their wealth in the economy. If it is their choice to reinvest in the economy or stockpile their wealth you will inevitably have those who will keep all their riches and not share.

A higher taxation of the rich would force them into reinvesting in the economy by virtue of government investment paid for by the increased taxes.

Originally posted by The Middle Kingdom
As for parallels, there is some similarity but also a wide gap because America is deliberately trying to widen the gap, the People's Republic of China is trying to shorten it but recent economic growth is hard to slow down and redirect to helping the poor.

I agree with you but im interested in your explanation as to why the current American administration would want to increase the gap between rich and poor. What would they gain from this?

Originally posted by The Middle Kingdom
Also there's the matter that a large percentage of China's population is rural in nature with however a large increase in urban growth but America is mostly urban with government subsidized/corparate farms.

I could be wrong, is there any sources to confirm the American percentage of rural farmers and urban spral?

The percentage of agricultural workers in the United States is 0.9% of the workforce. The American work force is 147.4 million (2004est) which equates to 1,326,600 rural workers.

Im not sure what the figures are for urban sprawl but the amount of land devoted to permenant crops in the United States 0.22% of the total land mass which equates to 21,189.1196sq km.

Source

Originally posted by The Middle Kingdom
Back to China's rural farmers, as I said no agricultural taxes and government investment is a big help, but rice primarily being a labour intensive crop requires many workers to farm it and the wages earned or profits earned are small in comparison to fruit and vegetable farming which is more mechanical in nature and provides a far greater yield of personal profit for the average farmer but... doesn't supply as much food, and as we know with 1.2-3 billion people China has alot of mouths to feed, we could feed ourselves but it'ld be hard and thus we are forced to import food for the sake of living conditions.

Is the Chinese rice industry nationalized or privatized? Surely China could set the wages of the rice farmers to better reflect their value to the country?

Originally posted by The Middle Kingdom
As for America if America keeps bastardizing (right word?) its poor and abusing them delliberatly I see either a large growth in independant parties or some more democrat presidents and possibly large cuts to the military.

That's one way of putting it, yes That assumes that America's voting system is free from manipulation. Surely, given the last two elections of 2000 and 2004, you don't honestly think the American elections are free and fair?

Originally posted by The Middle Kingdom
Also if the PRC manages with its 11th 5 Year Plan "next five years to persist in putting people first, change the concept of development, create a new development mode, improve the quality of development, carry out the "five balances" (balancing urban and rural development, development among regions, economic and social development, development of man and nature, and domestic development and opening to the outside world)" to change the development mode to something more benfitial to the rural areas then I see Washington going to become very embarrased if the "ChiComms out did them" and some politicians probably tarred in feathered which I'm surprised that the West does such things to its leaders, I hope its a figure of speach.

Tarring and feathering is an old western method of punishing criminals. It was primarily used for lesser crimes and was intended to embarrass and demean the criminal. We should bring it back for our political leaders! You might be on to something there

Originally posted by The Middle Kingdom
As for America deliberately trying to upset the Chinese people by investing in us, I seriously doubt that considering the incompetence in recent US leadership and the fact that your whole global strategy seems to change every 4-8 years.

That assumes that the visible American government is in charge of its machination. If there is an elite group of bankers controlling the US and British governments via the Federal Reserve and the Bank of England, wouldn't it be feasible to carry out a sustained bloating of the Chinese economy? Especially since Deng Xio Ping began opening up China to market forces.

Once again, thanks for sharing your views with us. I really do enjoy discussing this topic.

[edit on 14/10/05 by subz]

I'll ask a friend of mine whose parents are farmers whether is nationalized or privatized, but I'm under the impression that the prices are kept low so that those with less money can eat more healthy.

As for America's voting manipulation well.... the gini coifitiant equally points toward social unrest in the United Provinces of America right? If there's another rigged election (assuming its rigged) then maybe America will revolt I don't know. But we'll undoubtably try our best to help the American people endure the hardship.

"Doesn't that place the Chinese government in a position of faith? Faith in believing that the rich will infact reinvest their wealth in the economy. If it is their choice to reinvest in the economy or stockpile their wealth you will inevitably have those who will keep all their riches and not share."

True and as we have seen there is quite a bit of corruption up top but as explained by I think ChinaWhite or someone else China is a gift exchanging society and some people are brought up to think that when visited they deserve gifts and the other way around. If some politicians are corrupt they make it up to the people with hardwork, others being evil run away to the US when caught.

The rest are executed with a bullet to the head I hope they aren't given a blindfold or a cigarette when shot.

Back to America it would seem that your entire education system is designed to oppress children and prevent them from reaching their fullest potential, through incompetence in your education system millions of American children are abonedoned by society and are forced to work in either cheap jobs or resort to crime.

You (and I don't mean "you" specifically subz, so please don't take this personally and forgive my arrogance) also make abortions difficult, thus making sure that single mom or poor families with too many children can't make a good enough living for themselves. Some of this information is even recognized by one of your famous writers Orson Scott Card (www.ornery.org...).

In China while I don't even like the One Child Policy for as being somewhat traditionally raised I consider children a blessing on the household, by having only one child per family we can maintain living standards and allow families to earn better livings.

One day it shall be repealed, but I fear the reason why it would be.