Economic Inequality In China

2799 Words12 Pages
After the civil war and the establishment of People’s Republic of China and Mao Zedong assuming power in 1949, poor China’s new government planners realized the need of socioeconomic development. As socialists, they decided to copy the successful socialist economic model of the Soviet Union which is their communist political resort. This socioeconomic development relied on: the “command economy” that mainly depended on the state’s governance and control over the resources allocation, the ownership of all important large factories and enterprises “cash caws”, dominant of the raw materials, nomenklatura system and agriculture with cheapest prices, price system control. All of that were resources to finance the prioritized “Big push industrialization”…show more content…
Despite China’ rise of GDP per capita it did badly in equality measures. China’s Gina Coefficient (inequality indicator) in 1983 reached 28% which views less inequality like some Western countries like Germany (28%) and was described as an egalitarian society. However, after 1983 the national inequality increased massively in both urban and rural regions, the inequality gap between both was widened to reach about 45% in 2001. This percentage declares that China is one of the most unequal Asian countries as Thailand and Philippines. Unsurprisingly, China’s inequality percentage is transcendent to United State’s inequality percentage of 40%. This high inequality was imaged within the urban areas, in which their people enjoyed possession of the income-generating capital and skills and were able to benefit from the new economy. On the other hand, the rural people were deprived from this opportunity and lacked equal allocation of incomes and resources. Also, there were preferential policies for the coastal regions while not for interior ones. About 8% of people suffered poverty in 2001 and 145 million illiterate adults in 2003. So inequality is the main hole in Chinese economic policy (Naughton,…show more content…
It proved that communist institutions and state intervention can achieve progress in other sectors specifically economic one. Yet it couldn’t achieve regional economic hegemony. However, it can be a good example for other developing countries like Egypt which imports cheap Chinese products. Regarding the Chinese soft power, it had little impact because not many countries which imitated its economic system. It’s undeniable that China is a distinctive case but can’t be considered as self-determinant. In order to achieve its economic growth, China had applied 80% of the WC 10 basic tenets. It was highly committed to the WC policies through more fiscal discipline (more revenues share in GDP to more investments and lower income taxes), competitive exchange rates (through a fixed Yuan versus fluctuated Dollar), gradual liberalized and privatized enterprises of 11.7% alongside state-owned industries of 15.6%, little barriers to the global market economy like foreign investments of 29.3% in 2002 (Baek, 2005) . China’s mixed economy is an evidence for what Williamson viewed about the WC which is a mix between liberalization of market economy with the state’s

More about Economic Inequality In China

Open Document