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China: A vast chasm in incomes

The disparity of income and wealth amongst people in countries around the world is not new.     More recently the argument about 1% of the population in the USA was a major topic of debate during the presidential election.   Then there were the revelations about the top echelons in China having amassed enormous wealth - in a Communist country, no less!

The disparity - no, vast chasm! - between rich and poor in China is highlighted in this piece in The New York Times:

"This gulf, between the prosperous and booming cities and the poor rural areas, has been expanding since the 1990s. Along with official corruption, inequality is a major source of social unrest. In Chinese cybercommunities, where sentiments are aired honestly and anonymously, cynical and celebratory comments abound over any spectacular fall of the wealthy, corrupt or privileged. Often, anger erupts over the arrogant misbehavior of the “fu er dai” — the children of wealthy families, who often have powerful political connections. On Tuesday, the government announced a vague plan to address “stark problems in income distribution.”

Last month, China reported that income inequality peaked in 2008 and has narrowed since then, though many economists believe the problem is understated. For the first time in 12 years, the government reported figures for the Gini coefficient — an indicator of inequality. It said the coefficient was 0.474 last year, down from a high of 0.491 in 2008. (Zero would represent perfect equality, and 1 would represent complete inequality.) The Gini coefficient for the United States, after taxes and transfers, is 0.378 through the late 2000s, according to the Organization for Economic Cooperation and Development.

China has 2.7 million millionaires and 251 billionaires (in United States dollars). But 13 percent of its people live on less than $1.25 per day, according to United Nations data. Meanwhile, average annual disposable income in the cities is about $3,500."

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