Rising Number of Chinese Ultra-Rich a Sign of Poverty Gap?
China's extraordinary economic development has reached its zenith when two separate lists recently named it as having the world's most ultra-rich. By beating the USA for the first time ever, Weibo accounts like Stock Index Futures 998 proclaimed it as a positive sign, asking readers to "upvote for China":
And why not celebrate? Reports regaled readers with facts like there is one ultra-rich Chinese for every 10,000 people in China, and that the numbers of ultra-rich are only expected to grow by 140 percent in the future.
And yet, unafraid to cast doubt during a national celebration, The Beijing News has glumly pointed out that this is, in fact, rather bad news for China.
In an op-ed last week, The Beijing News warns that the increasing number Chinese ultra-rich is a telling sign that the country's poverty gap is widening.
The piece points out that this achievement is a hollow victory for an undeveloped country with a host of problems. The Beijing News wrote that a widening poverty gap will only be exacerbated by China's large population and poor welfare system, leading to widespread social instability.
Referring to the 2008 financial crisis, The Beijing News ominously warns China is doomed to repeat previous mistakes unless it changes its ways:
Although the scars have not yet healed, many people have clearly forgotten about the pain that it caused. As the country with the most ultra-rich people, we should be especially cautious.
Calling the news of having so many ultra-rich an "embarrassment," The Beijing News dampened the festive mood by writing: "Having so many ultra-rich is not necessarily a cause for celebration," pointing out that the world's money is being controlled by an increasing number of elite individuals."
The 2017 Hurun Rich List reported there are 2,257 people with a net worth over USD 1 billion who collectively control 10.7 percent of the world's financial resources (USD 80 trillion). Of these ultra-rich, 609 are from China, surpassing the 552 ultra-rich in the USA for the first time ever. As proof of this, Bejing has 94 ultra-rich compared to the 86 located in New York City.
Because experts have long disagreed over the poverty gap in China, the growing numbers of Chinese ultra-rich may be the most obvious sign that the rich are just getting richer while leaving the poor behind.
The Gini coefficient is a ratio that describes the distribution of wealth in a country; "0" represents an equal society while "1" represents all money being controlled by a minority. Economists at the Southwest University of Finance and Economics put China's Gini coefficient at 0.6 in 2014, while the University of Michigan puts that ratio at 0.53-0.55.
However, China's National Bureau of Statitstics doesn't think the country has one of the most unequal distributions of wealth in the world. Instead, they insist that China's poverty gap is getting smaller, reporting a Chinese Gini coefficient of 0.49 in 2010 and 0.46 in 2015.
This idea that things are only getting better is a predominant one in China. Your average Zhou may have gotten this idea stuck in his head by any number of red propaganda signs that span the length of the country:
"Recognize and approve of better living standards; let's build and enjoy prosperity together"
"Combine labor to promote harmony, achieve prosperity together as we pursue better living standards"
"Better living standards is something that concerns us all; establishing these conditions is everyone's responsibility"
Additionally, photos used to illustrate news stories about the 13th Five Year Plan insist that life will improve exponentially by pointing to the upper-right hand corner:
Do Chinese believe that their lives will be improved through these ultra-rich people? Will "trickle-down economics" work in China? Whatever that may be, some Chinese have a sense of humor about it.
The banner in following photo reads: “Comprehensively achieve good living standards; create a new Hanjiang (a district in Hangzhou, Jiangsu)."
For those of you who didn't get the pun, the Chinese term for "good living standards" (小康 xiǎokāng) is a term used to mean "a van."
Images: zjjxw.gov.cn, liuzhou.gov.cn, hjhsjd.gov.cn, dhclhm.gov.cn, wq.bjshy.gov.cn, 58pic.com, news.JSTV.com, mt.Sohu.com, JS-Study.cn, news.o2123.com, Reuters, Cup.com.hk, SBS.com.au
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