http://www.economist.com/news/china/21571460-chinas-government-unveils-sprawling-plan-fight-inequality-house-divided
Despite being a "communist nation", supposed dedicated to complete equality, there is a lot of income inequality in modern day China. This is not a new problem for China, as they have been struggling with really serious consequences that stem from income inequality recently. In order to combat this, China recently instituted a sweeping plan of reforms.
The plan targets typical Chinese state spending, with focuses on Education, Social Security, Public Housing, and Health Care. This plan is relatively late in addressing this issue, but economists say that late is better then never in this case. Lastly, there are serious doubts about the actual implementation of this plan, as many of the main policy makers would be personally negatively affected by the changes.
4 comments:
Having lived in a neighboring country of China for almost my entire life, I am fully aware of the income inequality China faced. There is a ridiculously huge gap between the haves and the have-nots. This can be seen especially in the trend of Chinese families sending their children to the US, UK, Australia etc. for school. However, when we take a look at the country side of China, we often notice extreme poverty. Corruption is common and because of that, we have reasons to doubt the actual implementation of this plan as you have said.
I would not categorise China as a purely communist nation anymore, due to the ability to privately own resources, even if the government still has a strong role in the economy. Unfortunately, income inequality is a problem all nations suffer to some degree, even here in the US. I am from a "third-world" nation myself and even living in a large, Westernised society there, poverty is very visible and hard to combat, particularly because of the sheer size of the population, which is a huge problem due to high illiteracy as well.
I agree with Aara that inequality is a difficult problem to solve. In addition to that, inequality is not always an alarming issue as long as the nation is prosperous. Unfortunately, that is generally not the case. However, we can look at the US to see a prosperous nation with a high standard of living but have problems of inequality and compare that to Pakistan where the income inequality is lower (based on Gini), yet most people will definitely want to live in the US. I think that reforms to improve education and crack down corruption will definitely improve overall efficiency but we may not use inequality as the only evaluating factor for the programs success.
I believe China's income inequality previously was a result of their mass manufacturing. China has been such a dominant force for exporting around the world because of the low wages their factories pay their workers. Obviously this has led to a huge income gap as the masses that work in these factories live in poverty because of the low wages they earn. However, wages are rising in China and as the nation shifts from an export-based economic system to a consumption-driven one I believe we will see wages increase, or at least government efforts to increase wages, in order to facilitate the transition.
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