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Sunday, May 05, 2013

Inequality Watch: China's Billionaires

Peter Kwong, professor of Asian-American studies at Hunter College, had an interesting piece about corruption and economic inequality in China in The Nation, April 22, 2013. Unfortunately, the article is behind a paywall. In any case, this is the most striking data referenced by Kwong:
Party officials and their family members have reaped the spoils of China’s prosperity and amassed unbelievable riches, creating a deeply polarized China. There are 251 billionaires in the country today, compared with only fifteen six years ago; 0.4 percent of China’s families own over 70 percent of its wealth.
In China, the economic elite are also the political elite. While political elites are wealthy in many nation-states -- even in democracies -- the concentration of wealth by Chinese national leaders is striking:
In 2012, there were more than 500 corporate CEOs in the National People’s Congress out of a total of 2,987 delegates. The top seventy members of this body are worth $89.8 billion. In contrast, the worth of all 535 members of the US Congress, the president, his cabinet and the nine Supreme Court Justices is only $7.5 billion.
As Kwong notes, the twin problems of inequality and corruption in China could prove destabilizing:
The mere fact that the Chinese are discussing their problems in terms of the French Revolution is momentous: it seems to imply that they see China today as resembling France in 1789, when public disgust with the regime’s corruption and decay led to revolution. Chinese people from all walks of life—intellectuals, professionals, laborers and farmers—have been agitating for political reform and demanding, at the very least, a constitutional government and the rule of law. Yet this is exactly what the one-party system cannot accede to, even though without real reform, the Communist Party’s future looks bleak. If it eventually collapses—which now seems a real possibility—China faces a daunting challenge: without a viable opposition group, trained and ready to take power and govern, the country will almost certainly slip into anarchy. 
I've previously noted that China's political legitimacy is built upon its sustained record of economic growth. That success has brought hundreds of millions of people out of extreme poverty. However, as China becomes wealthier and more overtly corrupt, more-and-more people are likely to notice the misbegotten concentration of political and economic power at the very top. And that could be explosive.

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