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Inequality in China: The Rural and Urban gap widens

22 Mar

Introduction

In the last 50 years China has undergone what can only be described as an economic miracle. To many, China’s growth is deemed as the most rapid of any economy on this earth. The last half a century have seen changes to China in an economic, social and environmental manner on a scale unprecedented before them. Since the ‘Open Door Policy’ was established in December 1978, the east coastal regions of China have expanded and developed in phenomenal ways to adjust, accustom and utilise the new influx of various types of business from foreign land (Wikipedia 2014). This has caused China to acquire wealth fast over a relatively short period of time. Wealth which was utilised for a country wide development scheme. This expansion and development however, hasn’t affect China in a universally equal way. The more western parts of the country suffer from poor geographical conditions and a lack of good infrastructure which has kept its usage more for agriculture and less for development (Wu, M. 2006). Over time the inequality of income and growth between the two main regions of China has become a very big problem, a problem of a scale that can slow or even retard the excellent growth China as a country has displayed up until now (Seeking alpha 2014). Overall the problem of inequality can become a roadblock for China in terms of social stability as well as its emergence as a world power and thus must be dealt with as soon as possible. In this blog I will talk mainly on the post reform era of inequality in China

 Image

The graph above shows a drastic increase in income inequality since the 1980’s. It must be stated however, that this doesn’t mean the rich are getting richer and the poor poorer.

Extracted from the sources website of this graph, it states that “While inequality has been rising in China, hundreds of millions of people have been lifted out of poverty

Source: lowyinterpreter.org

 

Image

Above is an image of railway infrastructure in China. As you can clearly see the eastern coastal areas of china have a well-connected and expansive network which slowly decreases in railway available the further west you go until eventually there are no railway links available.

Source: wikimedia.org

 

The Inequality Crisis Now

Before the reform, China was considered to be approaching what is known as economic convergence. Economic convergence is when the poorer parts of an economy may grow quicker (catch up) with the richer parts of the economy to reach an equilibrium.  After the reform however, China’s economy began to see an economic divergence as the divide been the Urban and Rural populations grew (Wikipedia 2013). A graph posted by the ‘National Bureau for Statistics in China’ (Fig.1) shows that from 1978 to 2010 the average wealth per Chinese citizen has increased by $17,126. This is a value almost double that of other countries considered high-growth economies (India for example). This however is coupled with a median wealth of $6,327. These figures indicated an uneven distribution of wealth within China (BBC 2011).

 Image

Fig.1

As you can see from Fig.1 also, the rural net income has slowly shown a greater margin between itself and the urban disposable income since 1978. This indicates the wealth is uneven between the Urban and Rural areas. Inequality is shown in a more personal manner in table by the ‘National Bureau of Statistic for China’ (Fig.2). In this table we can see that that the rural areas lack many appliances and technologies considered necessary for living in this day and age compared to that of the urban population. The problem seems to be bettering however, as from the table we can see a slower growth in the number of these appliances owned by urban households compared to rural in which the growth of their appliances and tech over the years have shown an exponential increase. These trends indicate that in China’s current state the inequality is slowing and may even be reversing to a more equal economy but this is too big an assertion to be making already.

Urban v rural China

 

Urban households

Rural households

(OWNERSHIP PER 100 HOUSEHOLDS) SOURCE: NATIONAL BUREAU OF STATISTICS OF CHINA

 

1990

2000

2009

1990

2000

2009

Colour TV

59

116.6

135.6

4.7

48.7

108.9

Cars

0.5

10.9

0.1

0.7

Motorcycles

1.9

18.8

22.4

0.9

21.9

56.6

Computers

9.7

65.7

0.5

7.5

Washing machines

78.4

90.5

96.0

9.1

28.6

53.1

Refrigerators

42.3

80.1

95.3

1.2

12.3

37.1

Fig.2

The main area of inequality in China as you can see is money distribution. As mentioned earlier, China is showing a growing inequality in the distribution of money throughout the country, mainly divided into a more generalised inequality for riches among the west and the east. As you would expect from such a divide in money distribution, standards of living throughout have been affected and are now also unequal. This is the case in many countries, including developed ones.

Closing The Gap

China does have plans and are taking steps to tackle their overwhelming inequality crisis. China has stated that one of their key focuses for their ‘five year plan’ revolves around tackling the issue of inequality. One way that China is trying to tackle inequality is by its new ‘Tax & Wage Reform’ announced last tear. The aim of this reform is to “raise wages, make interest rates more flexible and improve households’ return on assets”. This is all with the aim of reducing the population in poverty and increasing the middle class which would therefore begin to alleviate the inequality margin. In the ‘U.S.-China Economic and Security Review Commission Staff Research Backgrounder’ it is stated that China intends to raise the minimum wage to about 40% of the average wages in China. This is a step in the right direction, however, by the time this raise comes into full affect the effects of inflation may neutralise any potential gains in equality across the nation (Salidjanova, N. 2013). Since 2008 the income gap in China has decreases showing progress in China’s efforts to tackle inequality. For the past 5 years the GINI coefficient of china has decreased indicating change for the country in the right direction (Fig.3) however, experts say a coefficient above 4 can lead to social unrest that of which China still has. The GINI Coefficient is a measure of income distribution among countries residents. A lower score meaning a better distribution (Investopedia 2014).

 Image

Fig.3

Source: http://img1.caijing.com.cn/2013-01-18/112445270.jpg

*WORD COUNT (Without References): 1078

 

References (Harvard):

BBC (2011) Inequality in China: Rural poverty persists as urban wealth balloons [online] available at: http://www.bbc.co.uk/news/business-13945072 [Accessed 12 March 2014]

Wikipedia (2014) Open Door Policy [online] available at: http://en.wikipedia.org/wiki/Open_Door_Policy#In_modern_China [Accessed 12 March 2014]

Wu, M. (2006) China’s Wealth Disparity Between City and Country and the Government’s Policies

Toward It [online] available at: http://economics.uwo.ca/undergraduate/undergraduatereview/undergraduatereview07/3_Wu.pdf [accessed on 10 March 2014]

Seeking Alpha (2014) Chinese Inequality And The Growth Imperative [online] available at:

http://seekingalpha.com/article/2004171-chinese-inequality-and-the-growth-imperative

[Accessed on 10 March 2014]

Wikipedia (2013) Convergence (economics) [online] available at: http://en.wikipedia.org/wiki/Convergence_(economics) [Accessed 12 March 2014]

Salidjanova, N. (2013) China’s New Income Inequality Reform Plan and

Implications for Rebalancing [online] available at:

http://origin.www.uscc.gov/sites/default/files/Research/China%20Inequality%20-%203%2012%2013.pdf [Accessed on 8 March 2014]

Gini Index

http://www.investopedia.com/terms/g/gini-index.asp [accessed one 14 March 2014]

*WORD COUNT (With References): 1233

 

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Space and China

13 Mar

Image

An image of Chang’e-3 on the moon in December 2013

Source:http://nssdc.gsfc.nasa.gov/nmc/spacecraftDisplay.do?id=2013-070A

China has always shared a passion for science and the outer space along with many other countries. In the past they lacked the sufficient funds and/or technology to focus on space exploration and other such activities but as of recently, due to their rapid economic growth and their expansion program, they have been able to make space a focus and dedicate time and thought towards any such exploits.

By the year 2020 the international space station is expected to be retired. In the same year China space station should also be complete. Due to this it also means that Chinas space station may be the earth’s only foothold into space. The chief designer of the program told of the station “the 2020 space station will be a national space lab”. This would give China a place among other technologically advanced countries which share immense interests in space such as Russia, England, America, etc.

In December of last year the Chang’e moon lander landed on moon successfully. This was China’s first lunar and displayed just how far China has come as a country in terms of technology and innovation. China also plan for a 2017 launch of the lunar probe Chang’e-5. This will be part of China’s third-phase lunar program.

Reference:

1)      http://en.wikipedia.org/wiki/Chinese_space_station

2)      http://www.spacenews.com/article/civil-space/38131china-unveils-space-station-research-plans

3)      http://www.chinadaily.com.cn/china/2014-03/10/content_17336935.htm

One or Two? China’s ‘One Child Policy’

6 Mar

Image

An image of a Chinese family with one child.

Source: http://images.china.cn/

China is the worlds most populous country with a current populations of just over 1.35 billion. China has known of its explosive population which lead to it as a country creating the ‘One Child Policy’. This policy was introduced in 1979 as a way to alleviate China’s social, economic and environmental problems. The policy is based on a simple basis..  a family can only have one child. There were exception and special circumstances to this rule however. Only recently has China relaxed its laws on the ‘One Child Policy’ states that a family may have two children if one of the parents is an only child. Recently senior officials in China have spoke about they may opt for a country wide two child policy in the future. What will this mean for China? Ma, a deputy of the National People’s Congress said if this policy were to be introduced, the population of China would increase by 10 million people each year. Whether or not this is an accurate prediction we will just have to wait and see…

The Chinese Smog That Is Taking Over The World

27 Feb

Image

Smog seen from a building top in China

Source: http://www.dailymail.co.uk

 

Image

Smog in Japan  caused by the smog in China

Source: http://www.abc.net.au

 

China is facing an epidemic.. A very large epidemic in fact. The problem use to only affect China, however this problems radius of effect has become far reaching. China is the biggest manufacturer of goods for foreign countries with strong links for trade to most developed countries. Because of this fact it is also a very industrious country with a constant cycle of manufacture and shipping. This ‘super production’ doesn’t come without cost however. In part of China air pollution is ridiculously high which we know is a problem as these greenhouse gases contribute to global warming. This problem however, has become more than just exclusive to China.

 

This week states in Japan such as Osaka, Kagawa and Fukui issued pm2.5 readings. According to the epa.gov website the definition of pm is ‘PM, also known as particle pollution, is a complex mixture of air-borne particles and liquid droplets composed of acids (such as nitrates and sulphates), ammonium, water, black (or “elemental”) carbon, organic chemicals, metals, and soil (crustal) material’. a level of pm2.5 is considered as dangerous and unsafe and Japan blames these levels on the air from China being swept over seas. US also face air pollution problems from China via air from China also being swept over sees. Areas of America affected include Washington and California and Oregon.

 

China has been trying to tackle this problem but as of present it seems futile. America have tried to combat the problem of air pollution in their own country by outsourcing their facilities to counties like China only to have the pollution passed back to them via ocean drifts and winds.

 

References:

1)      http://kotaku.com/chinas-pollution-is-making-japanese-air-all-crappy-1531371641

2)      http://mashable.com/2014/01/23/us-china-pollution/

3)      http://www.theguardian.com/world/2014/feb/25/china-toxic-air-pollution-nuclear-winter-scientists

4)      http://www.epa.gov/region1/airquality/pm-what-is.html

China and its ‘many vices’

20 Feb

Image

 

Source: http://chinawatchcanada.blogspot.co.uk/2013/07/prostitutes-used-condoms-found-daily-in.html

 

The picture above is an Image of arrested prostitutes found in Guangdong 

 

“Any healthy society, while having a diverse range of ideas, should have some basic bottom line, some common sense and value. Liberation of thinking doesn’t mean having wild ideas, and it also doesn’t mean an indulgence of behaviour.” is the statement from an article in the People’s Daily (The mouthpiece for the communist party as it is called) that I feel best sums up the current president of China’s views on the vices of Prostitution, Drugs and Gambling.

 

Earlier this week China spoke out and exposed its problem of wide spread prostitution and other illegal activities that ‘embarrassed’ the Chinese ideologies. Shortly after this announcement The President of China, Mr Xi Jinping gave orders to begin the major crackdown which took place on several cities to find and stop activities deemed as illegal vices. The main target of these raids was the continued act of prostitution. It is known that in popular cities in China many services such as karaoke bars, nightclubs, hotels and spa’s offer ‘extra’ services to their customers indirectly acting as brothels and worsening this undisclosed problem.

 

One of the main areas targeted during these raids was the Guangdong Province. Guangdong is known as China’s sin city and has been known by such name for several years now. more than a hundred people were taken away for instigating prior to raids due to CCTV footage exposing prostiutuation in several establishments. The CCTV was provided from a state-owned broadcasters report.

 

The name of this operation is the ‘yellow sweep’ and had taken place as well as begun in 16 cities in nine provinces starting from the 10th of February. For overall figures, since the start of the sweep, the combined police force have so far investigated 1500 reports of vice crimes, arrested more than 500 people, and shut down over 2000 sites where it has been speculated that sex was for sale. These figures were reported by Beijing News of Tuesday this week. All in all this effort to clear up the streets of China was much needed however, it is a small step in a problem that revenues around “100 billion Yuan ($16.5 billion) of related economic activity”

 

References:

1)      http://www.bbc.co.uk/news/magazine-26247744

2)      http://www.nytimes.com/2014/02/18/world/asia/a-clampdown-on-prostitution-and-gambling-spreads-in-china.html

3)      http://www.bloomberg.com/news/2014-02-17/china-orders-crackdown-on-prostitution-after-raids-in-dongguan.html

4)      http://www.usatoday.com/story/news/world/2014/02/17/china-prostitution-crackdown/5550249/

China, Ivory, Trade… The problem

13 Feb

 

Image

A picture of seized smuggled Ivory in China in its attempt to crack down on its illegal trade.

Source:  http://www.chinadaily.com.cn/

 

 

Ivory is a rare, hard, white material derived from the tusks and teeth of animals, often used in manufacturing and art. Examples of it use would be the keys of a piano. It has long been established that the trade of elephant tusks (Ivory as they are known) are a serious and damaging problem that has engulfed the world for hundreds of years due to the ways Ivory is attained. In the past century the trade of Ivory has been become increasing more problematic due to the overall increase in pouching at an exponential rate to attain the material. This is due to the increase in popularity for the rarity among the rich as well as those seeking it for its possible future value. The Convention on International Trade in Endangered Species (CITES) secured an agreement in 1989 among its member states to ban the international trade in ivory. This ban is international however is often disrespected and ignored in many countries, especially Africa.

 

In more recent years, China (with its huge population) has sparked a surge in the popularity of Ivory amongst its people. The reasons for this surge in popularity is uncertain however reasons often stated for the buying of Ivory is its possible future value due to the fact elephants are becoming more and more rare as well as Ivories artistic prowess once sculpted. China is trying to tackle the illegal trade of Ivory as best it can. At present the sale of Ivory is legal as long as it is from the government’s stock pile of Ivory. This is often not the case. A mini documentary by the BBC explained the trade of supposed legal but most probably illegal Ivory in shops in China.

 

In this documentary we see a man walk into an unnamed shop in China fitted with a hidden camera. For Ivory to be sold he states that the piece being sold must be accompanied with a credit card sized ID with a picture of the piece. This ensures and thus proves that the piece is from the government’s own stock pile and not smuggled. On close inspection in the ID’s and the pieces it is clear to the man filming these pieces and the audience of the documentary that the piece doesn’t match the photo, therefore making it possible smuggled. This is a problem apparent in many shops in China that sell Ivory however China does have around 150 legal, government-licensed ivory shops. In these shops the sale of Ivory is perfectly legal as it is from stock. The governments take on Ivory sale is that is is an ancient art that it wants to keep alive as long as it’s done legally.

 

References:

  1. The Internation ban on Ivory sales and its effect on elephant poaching on Africa ByAndrew M. Lemieux and Ronald V. Clarke (The Abstract)
  2. Wikipedia.com (Ivory & Ivory Trade as searches)
  3. BBC.com (China’s Illegal Ivory Sale)