There is one thing in common between the United States and China: Both nations are suffering from widening income inequality.
The so-called Gini Index, an index that shows the rich-poor gap, “in rural China stood at 0.3949, nearing the warning level of 0.4 set by the United Nations,” according to a report released Tuesday (Aug. 21st).
The latest survey by Central China Normal University's Center for China Rural Studies noted that the cash income of rural households grew 14.13 percent from a year earlier to an average of 38,894.4 yuan ($6,173.7) last year, and the per capita cash income in rural areas rose 11.95 percent to 9,260.6 yuan ($1,469).
Farmers in China aren’t getting rich by farming, though. Contributed to such an income growth in the rural areas are rising wages earned by those who have abandoned rural life to work as migrant workers in cities, the study reported.
More troubling is that those in rural households are becoming more dependent on wages earned by their family members who left home. The survey revealed that wages paid to the migrant laborers accounted for 65.7 percent of the total income of rural households.
The survey also found that the total income of the top 20 percent of the rural households was 10.19 times that of the bottom 20 percent. The wealth gap in west China was bigger than in the east of the country, according to the report.
The survey by Central China Normal University did not address the wealth gap in the nation as a whole, because its scope was limited to the study in the rural area.
However, Xinhua, the state-owned news agency, reported that the wealth gap [expressed in the Gini index] in China as a whole is well above 0.4, due to the large income inequality between urban and rural areas. The last time the Chinese government published a Gini index for the nation was in 2000 when it stood at 0.412. But most scholars now believe the index has grown to somewhere between 0.45 and 0.50, reported Xinhua.
In a Gini index, 0 shows perfect equality, and 1 is perfect inequality (i.e. one person has all the income).
According to the U.S. Census Bureau, the Gini index in the United States in 2009 was 0.468. That's getting dangerously close to the Gini index of China, as shown below.
Income gap is a tough topic. The Gini index might show US and China be around the number. Nonetheless, I believe there are more Chineses suffering than Americans. There is no doubt there are a lot of challenges in front of China government. Although the article isn't related to technology, we'd better keep our ears up. Whatever happens in China will likely affect the rest of the world. They are the biggest manufacturers after all.
Due to historical reason, the primary transportation mean is self own vehicle. In another part of the world, if there are so many people being transport from point A to point B, public transportation is a necessity. Imagine if 75% of Chinese own a car, how wide and many road government has to build.
hint: the key is balance, it's cool to relax a little bit and earn some easy dollars.
just like samsung can emulate a couple of competitors tricks,
but don't got too far, or you ll get biten.
From engineering point of view, maybe politically incorrect, there are two ways to reduce the Gini.
OptionA: Overthrow the government, lead the nation into war, put everybody back to poverty. Gini index reduced. Example: Iraq
OptionB: Gradually moving/changing the government to adapt to the growth of the middle class. Raise a healthy and good middle class. Example: Sweden, Denmark, etc.
Which option do you want China choose as a country?
Thanks for your advice. Our plan is to do both: original reporting/interviews and finding relevant information (data points) reported elsewhere to help us understand the background. One can form an opinion about China based on anecdotes, but when the subject -- in this case -- is as complex as China, you need both good interviews and background stats to back it up. Don't worry, I am heading to China again shortly.
Indeed, the question is how to go about that. This coming fall two major tax / budget legislation will be passed. (They are currently in drafting stages) It details will determine the way China will go forward.
I'm personally hope they go the reduce VAT and impose property tax route, the will remove the strange situation of goods cost more to down the domestic Chinese distribution chain than the international distribution chain and having the added benefit of curbing real estate speculation. However, it would have overcome the power real estate interest the permeate all levels of Chinese government and business right now. (There was a joke that all business deals in China is just a real estate deal in disguise, which unfortunately might not be far from the truth.)
hey Junko, i think these type of macro economy/social topic is slightly beyond your capacity.
you should focus your energy in writing some more original and 1st hand interviews instead of copy and pasting from internet (yeah, not exactly, with some re-processing).
otherwise I would suggest your boss cut your post and let you enjoy your blogging.
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