Markets often widen inequality - which is a bit of a problem if you are an ostensibly 'socialist' regime. Mark Thoma of Economist's View cites a Washington Post report that the Chinese authorities are trying to Put the Gini Back in the Bottle:
Chinese officials are promising a more equitable distribution of wealth over the next five years:
Chinese Officials Vow to Spread Growth Benefits, by Edward Cody, Washington Post: The ruling Communist Party vowed Friday to spread the benefits of economic growth more fairly among all levels of Chinese society, seeking particularly to close the yawning income gap between farmers and city dwellers. The pledge, issued by the Politburo, the country's top policymaking body, was seen in part as a response to growing unrest, especially in small towns and villages, ... "In the next five years, China should pay more attention to social fairness and democracy and earnestly solve the problems closely related to the people's interests," ...
The statement ... reported on a meeting of the 25 Politburo members ... in Beijing under President Hu Jintao, who is general secretary of the Central Committee and thus the senior party leader. ... Hu and his premier, Wen Jiabao, have strongly emphasized the need for more equitable wealth distribution since taking over the Chinese leadership nearly three years ago. Nevertheless, the gap between rich and poor has continued to widen ... The Politburo's call for more determination to attack the problem reflected growing awareness ... that widespread dissatisfaction over the glaring inequalities has become a potentially troublesome political issue.
(Mark's post has a more extended quote from the article). Maybe it's just the translation, but I find it interesting that the Chinese communist leadership are now talking about "social fairness and democracy" rather than socialism, or 'democratic socialism'. Is this progress?
A related article in Study Times, a newspaper run by the Party School of the Communist Party of China Central Committee, warned the income gap in China reaches alert level:
After rapid expansion since 2003, the income gap in China has reached the second most serious "Yellow Light" level, or alert level, says an article on state media. "Unless effective measures are taken, the gap may drift further to the dangerous 'Red Light' level in the next five years," says the article in Study Times, quoting from a research report of the Ministry of Labor and Social Security.
Also worth reading is How to interpret Gini Coefficient in China on the China Economic Net website.
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