Posted On 2014/07/29 By In Chinese Perspective, Economics, News, Research, Government With 713 Views

China is getting richer – and increasingly unequal

China is becoming more unequal as it gets richer, with about a third of the country’s wealth now concentrated in the hands of 1% of its citizens, according to new research. A report by the Peking University Institute of Social Science Survey also found that the poorest quarter of Chinese citizens owned only 1% of the country’s wealth. The report, which was covered extensively by China’s state media, concludes that while the country is getting richer as a whole – the average net worth of a Chinese household rose 17% between 2010 and 2012 to $71,000 (£42,000) – inequality is a serious and growing problem.

It says the country’s Gini coefficient, a widely used indicator of economic inequality, has grown sharply over the past two decades. A Gini coefficient of zero represents absolute equality, while one represents absolute inequality. About 20 years ago, China’s Gini coefficient for family net wealth was 0.45, according to the the People’s Daily website, a Communist party mouthpiece, but by 2012 it had risen to 0.73. According to some analysts, societies that have a Gini coefficient of more than 0.40 are at increased risk of widespread social unrest. Data from the OECD gives the US the highest Gini coefficient in the G7, after taxes and transfers, at 0.39, followed by the UK at 0.34 and Italy at 0.32.

In the US, the richest 1% of the population controls about 40% of the country’s wealth. The Chinese study, which took its data from a large-scale survey conducted by Peking University researchers in 2012, said nearly three-quarters of Chinese household wealth comes from property investments.

“This data is fresh. We know about national wealth, how much everybody’s wealth has grown, but we still don’t have many numbers on individual wealth,” said Li Wei, a sociologist at the Chinese Academy of Social Sciences. “I’m very glad that academic institutions are putting so much work into research, and presenting this data about how our economy is really doing. “In the future, government departments should take responsibility for collecting this information and presenting it quickly and transparently.”

Li said China’s biggest wealth discrepancies used to be between rural and urban areas, but a major nationwide urbanisation campaign had narrowed the gap. The greatest economic divisions were now between the affluent east coast and the relatively impoverished interior, and among different areas of individual cities and provinces, he said. According to a Credit Suisse’s 2013 global wealth report, about 1% of the world’s population holds 46% of its total assets. The richest 10% of earners own 86% of all wealth, and the bottom half owns less than 1%.


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Sources:

Article: The Guardian / Image: epSos 

China is becoming more unequal as it gets richer, with about a third of the country's wealth now concentrated in the hands of 1% of its citizens, according to new research. A report by the Peking University Institute of Social Science Survey also found that the poorest quarter of Chinese citizens owned only 1% of the country's wealth. The report, which was covered extensively by China's state media, concludes that while the country is getting richer as a whole – the average net worth of a Chinese household rose 17% between 2010 and 2012 to $71,000 (£42,000) – inequality is a serious and growing problem. It says the country's Gini coefficient, a widely used indicator of economic inequality, has grown sharply over the past two decades. A Gini coefficient of zero represents absolute equality, while one represents absolute inequality. About 20 years ago, China's Gini coefficient for family net wealth was 0.45, according to the the People's Daily website, a Communist party mouthpiece, but by 2012 it had risen to 0.73. According to some analysts, societies that have a Gini coefficient of more than 0.40 are at increased risk of widespread social unrest. Data from the OECD gives the US the highest Gini coefficient in the G7, after taxes and transfers, at 0.39, followed by the UK at 0.34 and Italy at 0.32. In the US, the richest 1% of the population controls about 40% of the country's wealth. The Chinese study, which took its data from a large-scale survey conducted by Peking University researchers in 2012, said nearly three-quarters of Chinese household wealth comes from property investments. "This data is fresh. We know about national wealth, how much everybody's wealth has grown, but we still don't have many numbers on individual wealth," said Li Wei, a sociologist at the Chinese Academy of Social Sciences. "I'm very glad that academic institutions are putting so much work into research, and presenting this data about how our economy is really doing. "In the future, government departments should take responsibility for collecting this information and presenting it quickly and transparently." Li said China's biggest wealth discrepancies used to be between rural and urban areas, but a major nationwide urbanisation campaign had narrowed the gap. The greatest economic divisions were now between the affluent east coast and the relatively impoverished interior, and among different areas of individual cities and provinces, he said. According to a Credit Suisse's 2013 global wealth report, about 1% of the world's population holds 46% of its total assets. The richest 10% of earners own 86% of all wealth, and the bottom half owns less than 1%. Learn more in our Global Ready China Seminars Sources: Article: The Guardian / Image: epSos 

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Stefan

Stefan (from Austria, Europe) has been living, studying and working in China since 2010. Stefan has worked on several research, publication and consulting projects focusing on the China Travel Market. He holds three Masters degrees and is an expert on China Outbound Tourism, Marketing and Social Media in China. Stefan works with BMG on the Global Ready China Seminars as well as the Global Ready China News and related projects. He also has teaching engagements in the areas of eMarketing and Tourism Strategy.

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