Inequality in China

27 Feb

Over the past three decades China has enjoyed an annual average growth rate in GDP of 9.8 percent, however with this growth comes a number of significant problems, for instance; Environmental degradation, growing wealth and income inequality. The focus for this week’s blog will lie in particular with the growing wealth and income inequality. The extent of the inequality is highlighted by China’s Gini coefficient figure of 0.477 (as of 2005) when compared to that of a developed country, in this instance Sweden which had a Gini figure of below 0.25 (as of 2005) and the warning level of 0.4 as set by the United Nations.

This growing disparity is largely fueled by the rural urban divide, this factor is exemplified when you take a geographical  view of China, where the majority of cities are located around the coastal regions in the East and the South. This is mirrored in the location of the wealthy, which follows the trend in cities. (As is seen in the figure below)

If however, the official Chinese figures are used, inequality does not seem to be as much a problem in the rural areas, for example in 2005 those living below the poverty line was only 2.8 percent however in reality the figure was closer to that of 15 percent when valued at the World Bank method.

http://www.theguardian.com/world/2011/nov/30/china-raises-rural-poverty-line

http://www.bbc.co.uk/news/business-13945072

http://www.project-syndicate.org/commentary/growth-and-the-chinese-economy-s-latecomer-advantage-by-justin-yifu-lin

http://inequalitywatch.eu/spip.php?article58

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