Thread: China’s widening income gap approaching dangerous level.

GDP per capita for 2003 was 530USD

http://www.finfacts.com/biz10/global...epercapita.htm

In my experience, in US, in a family of a father, mother and children, very often, only the father is working, and the mother does the home work or takes care of children. This is changing though, more and more women walk out of their family.

In china, all most the men and women of the working age have jobs or are looking for jobs because of the women liberation during the communist era. That's why chinese unemployment rate is high(9 or 10% or even higher).

In my memory, US defines the unemployement rate as the ratio of the active job seekers and the number of people who have jobs or are looking for jobs. He will not be considered as unemployed if he is not looking for a job even he is at working age.

For most of Chinese families of three persons, there are very likely two of them are working.

The numbers in the article is very likely for each person. I think around of 60% of a country's GDP is converted into resident income. You can find this if you do calculation on india or US's data.

Originally Posted by Sameer

GDP per capita for 2003 was 530USD

http://www.finfacts.com/biz10/global...epercapita.htm

GDP and income are different. The numbers I gave last time were the GDP per capita. Both of us confused the GDP and income.

"In my experience, in US, in a family of a father, mother and children, very often, only the father is working, and the mother does the home work or takes care of children."

That's just not true

I think the gap between the developed area and less developed area and the gap between the rural and urban area do exist. This caught national attention during recent years.

Central gov is taking some actions:
1. Develop the western area. A lot of money was poured into the infrastructure in the western area during the recent years. Central gov is encouraging some industries to move to there too. This has made some changes. The economy in the western area is developing much faster than before. You could find some data about this. But for some area, it is still difficult. Such as Guizhou province. There is natural limits there.

Western area had no industry at all before CCP took power. The best time of the economy in the western area was in 1960s and 1970s because of the "third front" construction. A lot of industries were moved to the western area for the possible war with USSR. many of those factories was civilized after the reform. That's why Changhong (one of the biggest electronic appliance companies), Jialing (one of the biggest motorcycle makers in China), Chengdu aviation company (one of the top jet fighter designers and makers in China), one plane maker and one jet engine maker in Guizhou. Dongfeng Auto (One of the biggest auto makers in China), you can find alot of this kind of examples. Hope western area can get a big push again.

2. For the farmers. The gov looses the control of population migration. So that people can move to the developed area more easily than before. Gov waived a lot of tax. Basically, farming is almost tax-free in China now. The central gov will pay tuition fee for the elementary school, middle school and high school education. This was a heavey budern for farmers. The central gov is trying to set up a cheap and workable public health system in the rural area.

The rural development still rely on the industrilization. 100-200 million farmers have jobs in the urban or development area after the reform. But they are still considered as farmers and the residents of their orginal provinces in Chinese statistics.

Originally Posted by oneman28

In my experience, in US, in a family of a father, mother and children, very often, only the father is working, and the mother does the home work or takes care of children. This is changing though, more and more women walk out of their family.

Where did you get this little piece of information from?

Originally Posted by oneman28

I think the gap between the developed area and less developed area and the gap between the rural and urban area do exist. This caught national attention during recent years.

Central gov is taking some actions:
1. Develop the western area. A lot of money was poured into the infrastructure in the western area during the recent years. Central gov is encouraging some industries to move to there too. This has made some changes. The economy in the western area is developing much faster than before. You could find some data about this. But for some area, it is still difficult. Such as Guizhou province. There is natural limits there.

Its still at its nacency level. It will take time for the western areas to catch up. This was attempted in India's north-east as well with a 10-year corporate tax holiday for companies which moved there, going has been very slow. So all the best to you with the western provinces. And you can't make trend lines with one year's data (i.e.) 2004, so stop saying that there is a growth "trend" in the western areas.
And from a low base, growth rates always seem spectacular for the first few years, I won't be surprised with even triple digit growth rates initially. So you will have to wait a few years before you can make a valid assessment.

Originally Posted by oneman28

For the farmers. The gov looses the control of population migration. So that people can move to the developed area more easily than before. Gov waived a lot of tax. Basically, farming is almost tax-free in China now. The central gov will pay tuition fee for the elementary school, middle school and high school education. This was a heavey budern for farmers. The central gov is trying to set up a cheap and workable public health system in the rural area.

India never had a population-migration control system.
All the other things which you mentioned have always been there in India,
For example, farmers have never paid any tax in India because it is not withinthe powers of the Central Govt. to levy tax on agriculture.
Free education, healthcare etc are all the social scemes which generally most govts legislate for poor farmers all over the world.
These are all not visionary-schemes.

Originally Posted by Monk

Its still at its nacency level. It will take time for the western areas to catch up. This was attempted in India's north-east as well with a 10-year corporate tax holiday for companies which moved there, going has been very slow. So all the best to you with the western provinces. And you can't make trend lines with one year's data (i.e.) 2004, so stop saying that there is a growth "trend" in the western areas.
And from a low base, growth rates always seem spectacular for the first few years, I won't be surprised with even triple digit growth rates initially. So you will have to wait a few years before you can make a valid assessment.

.

India is India, China is China. What India could not do does not mean China cannot do.
There are 10 provinces in western China (Some may include other two, make it 12), account for about 20% of Chinese population. Some of provinces are not poor in Chinese standard, such as Xinjiang.

Except Xizang (less than 3 million population) and Qinghai (around 5 million population), other provinces have good industrial foundations, such as Sichuan's Chendu and Mianyang, Panzhihua cities, Shaanxi's Xian City, Chongqing (It is a province-level admin city, same as Beijing, Shanghai and Tianjing), Gansu's Lanzhou city, Guangxi'Nanning and Wuzhou, Liuzhou cities, Yunan's Kunming city. You can name many others.

Textile, aviation design and manufacturing, electronical, mechanical, Chemical, atomic, energy(oil, coal, hydropower) and other industies in this area are very strong and important to China. There are many military industries in this area too due to the "Third Front" construction in 1960s and 1970s when China was preparing for the possible war with USSR. This industry foundation could be a very good start.

Higher education is good there. lanzhou University, Sichuan University, Xian Jiaotong University, Northwestern University, Yunan Universities, Chendu Electronical tech university, Chongqing university are among the top universities in China. That's why Motolora, Intel, Corning and other high-tech companies are investing in big projects there.

Western area account for around 60% of Chinese land and has a lot of natural resources. oil, coal, hydropower and many others.

China central gov can allocate financial resources to different places. gov has invested more than 850billion RMB (US$102 billion) in the infrastructure in this area. And US$10 billion investment was attacted to the area with growth of 20% each year. This growth rate is high than the national average. All this happens since 2000 when gov decided to "go west". (http://english.people.com.cn/200504/...27_182876.html)

With the effort of gov, The western area's economy grow at higher rate than national average even in 2002. http://www.china.org.cn/english/2003/Mar/58346.htm
Today, the GDP per capita in western China is only around 75% of the national average. The other area's economy still grows at fast pace. It will take long time for the western area to catch up or even never. But things will be improved.

Before, China paied to much attention to the international trade and most of industrial hubs were set up in the coastal area. For a country of the size of China, this cannot last long. Emphasis has been shifted to the internal market. Consumer sales increased very fast during recent years. This could do some good to the development of the western area.

Originally Posted by Monk

India never had a population-migration control system.
All the other things which you mentioned have always been there in India,
For example, farmers have never paid any tax in India because it is not withinthe powers of the Central Govt. to levy tax on agriculture.
Free education, healthcare etc are all the social scemes which generally most govts legislate for poor farmers all over the world.
These are all not visionary-schemes.

In China, farmers are the users of the land, not the owners by China's law. Today, it is free for farmers to use the land for farming and residential building.

Before the reform, the public education was free in China. Public health system was also very cheap. Unfortunately, we capitalized almost everything. Good thing is that the gov realized it. It found that we still need some sort of socialism. Corruption, capitalization of public education and health system were the three main reasons for which the gov gets trouble from people. The last two can be easily deal with in China's system. But the corruption will remain for a while.

China had strict migration-control system before the reform. We needed that because gov distributed food, cloth and many other living material and assign jobs accoding where you were living in the soclailism system.

But it is not strict today and gov does not distribute those goods and assign jobs any more. If a people wants to move to another place, you have to have money to support your livling of course. Farmers today can go to other areas to look for jobs almost freely. What you need do is registering with gov. Shenzhen was a small fishing viliage of around 2000 people. It is a morden city of around 7 million. Most of them migrated to the city themselvesonly in 2 decades. http://pdf.sznews.com/szdaily/2001/0418/1.htm

Except the official urbanization projects, many rural residents changed to urban residents in China. There are other about 100 million rural residents have full or part time jobs in cities or developed area. many of them stay there permanantely.

Originally Posted by oneman28

In my experience, in US, in a family of a father, mother and children, very often, only the father is working, and the mother does the home work or takes care of children. This is changing though, more and more women walk out of their family.

In china, all most the men and women of the working age have jobs or are looking for jobs because of the women liberation during the communist era.

That is crap. In the US women were liberated much before most of the world. They ran the factories that built the weapons and civil goods during WW2, and since then they have been a part of the US work force.

Lemontree ji

There is a reason why I stopped posting, why do you bother with him, "my experience" US women dont tend to work.

He is right.

Originally Posted by Sameer

Lemontree ji

There is a reason why I stopped posting, why do you bother with him, "my experience" US women dont tend to work.

He is right.

You can ask your co-workers around. Many american women stay at home for 2 or 3 years after they have a new baby even there are a lot of day-care facilities around. Some do home work always without going out to look for jobs.

From the CIA fact book, China has 920million people of age 15-64, But China has 760 million labor force. That means 82% of this age are working or looking for a job.

America has 198 million people of the age, 147million of them have a job or are lookig for jobs. The ratio is 74%.

Americans' Life expectancy is longer than Chinese. That means they can work longer. The ratio should be higher.

You feel shy to be here, because you , as a self-claimed economist, even don't know the difference between GDP per capita and the income per capita.