The Economist explains: What is code?
The Economist explains
FOR YEARS it has been a commonplace among those who watch China—and among those who lead it—that growing inequality is one of the greatest threats to the nation’s continued growth, development and stability. Nearly three years ago the premier, Wen Jiabao, promised both to make the “pie” of social wealth bigger, and to do a better job of distributing it. His government, he said, would “resolutely reverse the widening income gap”.
But for such an important issue, China has done a remarkably poor job of measuring and reporting on it. The Gini coefficient, a 101-year-old statistical tool that can be applied to many different indicators, is among the most widely used measures of income inequality around the world. Yet China went 12 years without formally disclosing its figures.
That changed last Friday, January 18th, when the National Statistical Bureau released a slew of data showing that China’s Gini number stood at 0.474 in 2012 (where a coefficient of zero would correspond to a perfectly equal society and a score of 1 would go to the society in which one person took absolutely everything). Though this is above the threshold of 0.4 that is sometimes reckoned to be a sign of potentially destabilising inequality, it is also down from the peak level of 0.491, recorded in 2008. These numbers put China in roughly the same range as America. There are plenty of countries that are more unequal than China, and still more countries that are less so.
But there are also plenty of serious questions about the accuracy of the newly released figures. In a blog post, a prominent Chinese economist, Xu Xiaonian, compared the newly reported Gini numbers to a “fairy tale”. Indeed, in Chinese policy circles, doubts the about methodological difficulties of calculating the Gini coefficient are not new, and have been cited as justification for China’s reluctance to report it.
Despite that official reluctance, hints and titbits have dribbled out before. Bo Xilai, the senior leader who was at the centre of last year’s most spectacular political scandal, used his final public appearance last March to reveal that China’s Gini coefficient had exceeded 0.46—and to suggest that increasingly concentrated wealth marked a failure of socialism.
Far more substantial than that last-ditch effort of a besieged politician was the academic study released in December 2012 which put China’s Gini number at an alarming 0.61, making it a contender for the dubious honour of nearly topping of the world’s inequality rankings (though still it would have fallen a good bit behind South Africa, which scores a contemporary world-beating 0.70).
If the official numbers released this week are to be believed, “Grandpa” Wen successfully kept his promise of three years ago and reversed a trend that was going the wrong way. But he took office nearly ten years ago, touting his determination to look out for China’s less-well-off. And the same set of official figures shows that income inequality is almost exactly where it was in 2003, recent reversals notwithstanding. The current premier is due to leave his post in March. Whichever estimate of China’s Gini coefficient is closest to the truth, there can be no doubting that his successor will have plenty more to do when it comes to distributing or redistributing that still-expanding pie.
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"The Japanese are able to live good lives today because their forefathers had conducted a looting (and slaughtering, destructing and gang-raping) spree in China."
Perhaps your parents/grandparents tortured and slaughtered 7 million neibours, teachers, doctors, writers,etc. during the famous Cultural Revolution 1965-75, so that China is enjoying current economic growth, boy.
Oh I forgot to mention that Mao's Great Leap Forward reduced 40 millio Chinese population that might have also contributed China's development.
History of both countries are stained with blood and cruelty, boy.
In China, two idioms describe two pitiful situations in which people don't have water to drink to quench their thirst and don't have food to eat to satisfy their hunger. One is to draw cakes to allay hunger and the other is to quench one's thirst by thinking of plums. There are also two implications about these two idioms with the one being even if there is only a fantasy or an illusion, so long as it shows a ray of hope, it still urges you on in pursuit of the glimmer without letup; the other being a sheer cheating.
There are two such pies in the sky drawn by the Chinese government in 2012. One is control of housing price, and the other is reform on distribution. The promise made by Mr. Wen at the People’s Congress that the house price is far cry from reasonable still resonated but the housing price in mainland China remains just the same. The gap between the rich and the poor is widening without any sign of stopping. Worse, there appears one more injustice apart from distribution, and that is pension system. Until now, dual systems are being implemented when it comes to retirement. For government employees or public servants, they don’t have to pay for their insurance in time of employment while be repaid equal amount when retire. For enterprises’ employees they have to purchase various insurances on their own pocket but will be repaid approximately to how much he pays when employed. The gap will keep on expanding when both ordinary hands and government officials are not able to work. The gap is there though pensions for both of public servants and workers are on the increase for consecutive 9 years until now.
Yes, China is a country with more than 1.3 billion people to feed on, and is still poor by average in natural resources and social welfare compared to the advanced economies. Chinese people are known for frugality, thrift and hard work but they are conscious of one belief that inequality rather than want is the cause of trouble. Social inequality, together with corruptions, should be CCP’s priority, and there should be more substantial measures to curb rather than drawing pies in the sky, no matter how large they are. Political legitimacy of the ruling party lies in supports of people whose welfare is satisfied.
Mr. Xi pointed out a couple of days ago addressing an important meeting that both ‘tiger’ and fly’ should be attacked when it come to crackdown corruptions, and doubts linger that when and how such campaigns be launched. Government official property report system should be established from the top to the bottom, and who is responsible for breach remains unsettled even though the system is set up. A cleangovernment is waht I expect though I don't think the political Gini co-efficiency adopted by the west is right.
You should forget. None of it matters today.
If you try to make it matter, you should remember the old proverb: "Before setting out for vengeance, dig two graves".
Figures released by China’s government on the distribution of incomes are at odds with academic research. The accuracy of the recent Gini coefficient is an important one if we are to have a true picture of China’s level of inequality.
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The National Bureau of Statistics stopped publishing index findings in 2001, citing difficulties in collecting data from wealthy households. However, it has now released information for the years 2003 to 2012. Analysts say the move was to help prepare for income redistribution reforms.
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The official index shows that the country’s wealth gap peaked in 2008 at 0.491, then fell over the years to 0.474 in 2012.
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The Gini coefficient measures income inequality on a scale of 0 to 1,where 0 is perfect equality and 1 total inequality. A reading above 0.4 usually marks strong inequality.
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But the government’s findings are at odds with a report released in December by researchers at the Southwestern University of Finance and Economics in Chengdu. It said the index for 2010 was 0.61, much higher than the government’s 0.481. The discrepancy has caused uproar because critics say the official numbers do not match what ordinary people are experiencing.
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The Government of China said its Gini index figures were in line with estimates provided by the World Bank. The World Bank, though, has based its research on sampling statistics from a Chinese work team sponsored by a Chinese bureau (China Securities Journal) that reported in 2010. Corroboration, therefore, could mean nothing. Doubts linger over whether high-income families’ income has been underestimated and whether the sampling techniques used by the researchers at Southwestern University of Finance and Economics have been inflated to better China’s Gini coefficient. If that has been the case it would be detrimental to policy-making.
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The bureau has not released its original data or explained how its figures were calculated.
The model of China’s economic development could be compared to its unique high speed train running on track, and it’s certain the train is due as planned but some passengers on board are not so privileged as to be assured of adequate protection resulting from broken windows of their compartments and shortage of wrappings to fend off cold following on accelerating, which is one of by-products of social injustice caused by blind pursuit of growth to the neglect of levelheaded distribution of wealth created by all citizens involved.
Blind pursuit if economic growth leads not only to unbalanced results but also disastrous damages to environment, and smog or haze over major northern cities these days in China is manifestation of such an ecologic disturbing. Development today can not and should not be achieved at the cost of our surroundings of tomorrow, or the blue sky of our younger generations.
Blind pursuit of growth produces GDP complex, and GDP has become the only criterion to assess and promote local government officials, which makes development model more lopsided especially in areas where natural resources are abundant like Inner Mongolia.
Blind pursuit of economic growth also breeds puzzle headed among people, which challenges Chinese traditional values of morality and responsibility and results in more serious consequences on mentality of younger generation.
It’s high time for CCP leaders to sit down to concentrate on structural adjustment about which they have complained for years. Market economy with Chinese characteristics should be carried out with all factors of the society being taken into consideration rather than just materialistic ends.
Why not to lower the pace of the ‘High Speed Train’ a little to make some meditation on what has come into views outside of the compartment the same time to provide better protection for all passengers on board of the train with a common goal?
"Nearly three years ago the premier, Wen Jiabao, promised both to make the “pie” of social wealth bigger, and to do a better job of distributing it."
Well, it was only Wen Jiabao, who amassed US$2.5 billion of fortune and his colleagues in the CCP who realized that promise. Much of that fortune went abroad via illegal means (by the CCP officials, maybe it is not illegal as they draw the line in an arbitrary manner.). Not only they trannsfer assets, but also they transfer their families, sons and daughters, abroad for safe heaven. USA and Canada profits out of this much.
And the have-nots?
More than one billion Chinese are under poverty line like the people in Sudan or Somalia.
If we insist on an eye for an eye as our standard for justice, pretty soon we'll all be blind. Making today's Japanese suffer will not change the suffering of your ancestors, but it makes the suffering of your descendents more likely. There is no end to patrimonial revenge.
We Chinese will be able to live much better and prosperous lives after we have successfully taken back the wealth (with incurred interest) that Japan had looted from China from the late 19th to the mid 20th centuries.
I don't trust any figures released by Chinese Government. It seems that we Chinese citizens are all fools. The gap is in sight and could be seen everywhere around China. Some officials drive rich cars and live in villas while some citizens sleep on the floor of railway station. That is the gap, it's unnecessary and meaningless to measure it but to work on it. Since many interest groups had been formed in China, the so-called "income distribution system reform" could never come out. In China, life is tough and peole are on their own.
Why are public officials allowed to keep their personal assets a secret? The central gov should say today that every official from Mr. Xi to the lowest village cadre has to disclose all of their assets, and these disclosures will be audited by an independent body. Chinese taxpayers deserve to know exactly how their money is being spent.
Do this, and income inequality will iron itself out in a couple of years. It'll probably pop the housing bubble as well, with all the illicitly purchased properties entering the market.
@ Pacific Centuryin reply to SandamanJan 23rd, 08:10
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'Te Japanese are able to live good lives today ......... '
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it's all very well articulated in your entire comment, except the above para.
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the japns have NOT been living good lives, unless you call a live, of 'wang guo lu/ 亡国奴' == meaning by definition people whose nation was surrendered and are now a vassal state without independence or freedom. its people are second class people as seen by its occupier.
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that's because japan is still under heavy foreign troops occupation, even 73 years after its efeat and surrender == , is worth living for. not a good live.
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for japns war crimes, many japns war criminals were hanged by the us and excuted by the chinese after trial. japns people were nuked twice. Not a good live.
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and japns owe everything japan has got since ww2 to the benevolence and kindness of the us, from economic opportunities of korea war to vietam war, to all sorts of technology transfer from the us, and whatever japan can steal or copy == from transistor radio, TV, VCR, to rockets and satellites, everything. but the price japanese were and are paying is unlimited occupation by and abject subservience to the master the us and it has to do whatever the master dictates, including plaza accord that sent japan back 20 years. not a good live.
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the japanese finance problem is terminal. japns sovereign debt is over 230% of its GDP and japanese debt is world's largest in absolute value. the worst part is that such heavy debts are borne, not by international investors, but by the poor japanese people themselves. and it works out that each working japanese will bear a debt of $145,000, or 300% more than G7 average by 2016. japan and japns people are technically broke, and running out of money too(so they are QE or pinting money like mad now). Japan is doomed. not a good live.
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I love japns people, and I hate to see japan is dying a painful slow death like this.
No, it is because Asian parents choose to have sons rather than daughters.
My paternal grandparents had fled to HK from Guangzhou in the early 1940s with my dad when he was a baby because of the Japanese invasion. Thanks to the Japanese invaders, my paternal grandparents’ families had lost almost everything (both of them were from wealthy families in Guangzhou) and had to endure lots of hardships, ditto to my maternal grandparents’ families in HK, and literally all the Chinese in that period.
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I know it’s a common practice of ignorant people to defend Japanese atrocities in China by pointing fingers to the wrongs of the CCP and Mao, as if it would automatically shed the sins of Japan. What a cheap shot!
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I tell you what, if not for the Japanese invaders, the Chinese civil war would have ended much earlier and China would not have been so badly devastated, and the CCP and Mao might not have been able to come into power at all!
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Because of the Japanese brutal invasions, slaughtering, raping and ruthless plunders, China was ruined to the ground and had become dirt poor. In order to quickly revitalize the economy and industrialize the war-torn China, aggressive (and somewhat stupid) social policies such as the GLF were implemented. Precious grains had to be exported in order to earn enough foreign exchange for the importation of machineries and other goods.
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If China had not been pillaged by Japan, it would have had more than sufficient wealth for the importation of necessary goods and would not have had to export grains (which could have been otherwise fed to its own people).
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In other words, JAPAN IS THE ROOT CASUE OF THE GREAT LEAP FORWARD which had eventually caused 20-40 million Chinese lives due to widespread famine.
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Due to the epic failure of the GLF, Mao was marginalized by other moderate CCP leaders. In order to bring back his prestige, Mao had then initiated the CR which had eventually caused great sufferings to the China and the Chinese people.
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In short, if NO JAPANESE INVASION -> NO GLF -> NO CR -> NO GREAT SUFFERINGS OF THE CHINESE PEOPLE.
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Japan is indeed the roots cause of many of China's miseries.
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We Chinese will never forget that the Japanese hands are full of Chinese blood.
Compare with the incalculable amount of wealth and resources ruthlessly pillaged by the Japanese invaders from the late 19th to the mid 20th centuries, the wealth that Grandpa Wen’s family has allegedly accumulated is merely peanuts.
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But at least Grandpa Wen has done a decent job by bringing China forward. As for the Japanese invaders, they had brought nothing to the Chinese people except for countless pain, sufferings and miseries.
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The Japanese are able to live good lives today because their forefathers had conducted a looting (and slaughtering, destructing and gang-raping) spree in China. That’s how Japan got the capital to develop in the first place.
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The prosperity of Japan is practically gained at the expense of Chinese poverty and agonies.
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This is the original sin that the Japanese will have to carry forever.
It was one thing to order the army to fire on students and urban workers in Tianemmen Square. But will they fire on people who are like themselves, and who have had enough of what they see as intolerable unfairness?
If we're playing the blame game, why not blame the Americans? If Commodore Perry hadn't visited Japan, the Japanese Empire would not have ever existed in the first place.
Of course, America did go on to defeat that empire and liberate China, but let's ignore that since we're already ignoring Mao's destruction of the Chinese economy and the massive amount of Japanese wealth brought to China in the last 50 years.
Reparations aren't worth it. And if you want to talk about total wealth looted, Russia is the biggest thief since they got Outer Manchuria which is worth more than the Japanese ever stole.
while chinese have had inferiority complex with respect to just about any nation on earth for being a weakling and being plundered, looted, raped and murdered by foreign powers of the last 200 years, it's not so much of their own doing per se, and therefore they can bounce back with confidence and strength like they have done now.
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the sad thing is that japanese developed inferiority complex with respect to chinese, americans,... because of japanese own doing through comitting war crimes and losing the war with hands (ah) up. the inner guilt and outward unrepentenance are so ingrained so that japanese are incapable of coming out of such inferiority complex. and it even shows so through japanese posts here.
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that japan is still occupied by its war victor and is still a vassal state did not help either. now that japan is financially broke with little or no money (they are printing money now), I don't see how japanese could ever get out of this inferiority complex. they could get more money from china for the moment, but this time japan has to ask nicely and say pleeeease.
"it is in the accumulators' long term interest to reduce that GINI index to more equitable levels"
People do not think long term, they think about themselves and their family, so they think maybe 30 years ahead. This applies especially in developing countries where no one is really sure if their country/political system will still exist 10 years down the road, let alone 30.
You see the greatest wealth disparities in China, India, Khazahkstan, Malaysia, most of Africa because these countries have not yet developed mechanisms to re-distribute wealth, eg. free health care. It is dog eat dog because they do not feel they owe anything to their country when it only emerged from colonialism 50 years ago and is quite likely to disappear under some invasion/environmental catastrophe/revolution/plaque soon anyway, so they fill their boots while they can and book their open-ended plane tickets to the West.
Read Eric Hobsbaum, he explains it beautifully.
No doubt things got distorted by the war. However you're blaming all of it on Japan. The way you talk about it it sounds like you are very biased and leads to think that the version of history you have is all one sided. I hope not but revenge might be "a gentleman's" thing to do, but if you did that then you would have to kill not just the Japanese but countless other nationalities...and in return they would have to kill you...and many of your own country men would be just killing each other as most of the atrocities in China have been home made...you might just have to kill someone you think you like or very close to you because his grandfather did something to your grandfather, etc...and don't forget, the Japanese got a local hand when all this was going on..so more of your compatriots to get rid off. Think about it...still, this article is about income inequality. Let's deal with that, shall we?