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No.10 China’s Income Gap

25 Apr

At first, please have a overview from a CNN report.

Just have a look some examples:

With the same two workers who are state-owned enterprise workers, the one who is working in electricity meter reading get 100,000 RMB (about 9,900 pounds) per year but he other one who is a steel worker can only get 20,000 RMB (about 1980 pounds) per year. Chen Jiulin, who is a general state-owned enterprises manager(China Aviation Oil), his annual pay is 20,000,000 RMB (about 1,980,000 pounds).

With massive land, abundant natural resources,Chinahas a huge cheap labor, low taxation and a growing consumer market.InChina’s first stage of economic development, the nation’s success derived from cheap labor and low prices. China’s workers are still living in poverty even through the country’s economy is developing fast. Probably they are just sacrificial lambs for the economic achievement. The article in the newspaper, run by the Party School of the Communist Party of China Central Committee, says the rich population consisted of private business owners got rich due to their talent and diligence, but those who gained wealth through collusion with officials in power-for-money deals or because they happen to work in monopoly companies or because they stole state assets.

(available at: http://www.google.co.uk/imgres?imgurl=http://coto2.files.wordpress.com/2010/09/income_gap1.gif&imgrefurl=https://coto2.wordpress.com/tag/income-gap/&usg=__yduFwRFLT9y_qAwkYPMEH9jJmkE=&h=496&w=325&sz=29&hl=zh-CN&start=0&sig2=ds4XMoitzYDG0H-iPngksw&zoom=1&tbnid=1zxwO5A4M9wF4M:&tbnh=147&tbnw=96&ei=X860Tdz_MIGO8gOlhomWDA&prev=/images%3Fq%3Dincome%2Bgap%26hl%3Dzh-CN%26biw%3D1225%26bih%3D605%26gbv%3D2%26tbm%3Disch&itbs=1&iact=rc&dur=328&page=1&ndsp=18&ved=1t:429,r:1,s:0&tx=87&ty=59)

However, is there any necessary change for the situation?

A Chinese professor thinks that the key point of income gap is monopoly and corruption. These two elements directly lead to the income gap. Yes, all of this income gap stuff is depressing, insofar as it tells us about the problems we are currently facing. We are hoping the government to take some effective measures to improve society and ease the income gap.

No.9 The China in Gini Coefficient

24 Apr

Recently, income gap became a hot topic and got much concerns inChina’s society. Before the economic reform and opening-up,China’s property is concentrated in the hands of the government. There was only a small income gap between urban residents and rural residents as well. Because of the economic reform was started from rural economy, so 1985 became the year which had the smallest income gap between urban residents and rural residents. However, with the development of the reform,China’s cities got huge improvement so that urban-rural income gap was continuing expanding.

The Gini coefficient is a measure of the inequality of a distribution, a value of 0 expressing total equality and a value of 1 maximal inequality. It has found application in the study of inequalities in disciplines as diverse as sociology, economics, health science, ecology, chemistry, engineering and agriculture.

It is commonly used as a measure of inequality of income or wealth. Worldwide, Gini coefficients for income range from approximately 0.23 (Sweden) to 0.70 (Namibia) although not every country has been assessed.

 

(available at:http://en.wikipedia.org/wiki/File:Gini_Coefficient_World_CIA_Report_2009-1.png)

China’s Gini Coefficient has been reached to the international alertness line level. A report released by the Asian Development Bank revealed thatChina’s Gini coefficient – an indicator of the wealth divide – rose from0.407 in1993 to0.473 in2004. If the Gini coefficient is calculated to include unpaid taxes and illegal income, then it rose from 0.47 to0.49 inthose years. However, the international alertness line of Gini Coefficient is 4.0.

In the world today the gap between the rich and the poor becomes wider and wider. Social and economic growth in many developing countries is slow, and one-third of the population in developing countries still lives below the poverty line. Development is uneven in the Asia-Pacific and throughout the world. The gap between the rich and the poor still exists. It is really a serious challenge forChina.