Thursday, April 21, 2016

Some are more equal than others..........


     This enormous demographic denomination can fry Western sensibilities about wealth and poverty.  China is now, by some measures, the world's largest economy, and will be so by a measures soon.  Divide this wealth by the population, however, and China lags.  Its GDP per capita is 20 percent below the world average, putting it on par with Tunisia and the Dominican Republic.  Its neighbor South Korea has nearly triple the per capita annual national income, while Japan, the U. S., and most of northwestern Europe have quadruple.  China is rich, but the Chinese are poor.
      Or at least poor on average.  The fateful moment for the Chinese economy, crippled by central planning and collectivized production, was when Deng Xiaoping, China's long-term leader after Mao's death, announced that the country would pursue "Socialism with Chinese characteristics," which is to say a market economy under authoritarian technocracy.  This was in 1977, as good a year as any for marking the birth of modern China.  Deng and his associates undertook a job akin to that of a political bomb squad, laboriously dismantling most of the economic ideology installed by Mao without blowing up political continuity at the same time.  That they succeeded is in many ways the single most important political fact of contemporary China.
      It was also Deng who said, "It is OK for some people to get rich first."  Communist orthodoxy had made general advancement of the rural population their stated goal since the revolution.  For Deng to say otherwise was a near-total break with previous economic theory.  Since then, and especially in recent years, some people have indeed gotten rich first.  China's growth has been accompanied by the creation of such vast, concentrated fortunes that its income inequality now tops that of even the U. S.  China's previous two periods of rising inequality were both brief, and the result of collapses in the incomes of the poor, during the Great Leap Forward and the Cultural Revolution.  Today it is different - the incomes of the poor, even the rural poor, have been rising, but the incomes of the urban rich have been rising faster.
      Income inequality and the urban-rural divide are also mutually reinforcing.  The big cities are increasingly where the money is.

-Clay Shirky,  Little Rice:  Smartphones, Xiaomi, and the Chinese Dream

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