Tuesday, September 9, 2014

China's Gini Coefficient at 0.73 Shows Deng's Reform Has Failed

Recently Peking University issued a report pointing out that the top 1 percent of Chinese households possess over one-third of the nation's wealth. 

But, 25 percent of the poorest families own just 1 percent of the country's wealth. The report says that families' net property of the Gini coefficient stood at 0.73. Experts say that the huge gap between rich and poor shows Deng Xiaoping's reform and opening policy doesn't work. 

The state-run mouthpiece people.cn said that Peking University's Institute of Social Science issued a report -- “Chinese Livelihood Development Report 2014” on July 25.

The report says that Chinese inequality in property has increased rapidly. The net wealth of Gini coefficient was 0.45 in 1995, 0.55 in 2002, and 0.73 in 2012. The top 1 percent of the families have a third of the nation's wealth. However, 25 percent of the poorest families possess just 1 percent of national wealth.

The Gini coefficient also known as Gini index, is an international measure of statistical dispersion intended to represent the income distribution of a nation's residents. The higher the value, the more the inequality would be.

Jian Tianlun, US-based economist: “We knew in the past that Chinese wealth distribution is seriously unequal. However, the government's statistics have no credibility. We don't know the truth. This time the Gini index is 0.73, it is definitely the top in the world. Around the world only six countries whose Gini index is over 60 percent, and China is on the top. The other five countries are all located in Africa, they are either very under developed or exist serious racial differentiation.” 

Jason Ma, NTD Television special economic commentator: “This figure is shocking and strange. In the world, such as in Latin America, society likely became unhealthy by differentiation between rich and poor. China's Gini index reached 0.73, which proves that Chinese society is completely abnormal.” 

Radio France Internationale (RFI) reported that although Chinese major websites had reproduced people.cn report, the comment function had been disabled. There is no single post to follow the article. Not even propaganda posts followed. 

Writer Nanjinglong's blog pointed out that the reason is simple, if they sent 50-cent Party to post lies, it cannot prove the Chinese Communist Party's “Great, Glorious and Correct”, on the contrary, it will result in even worse impact. Under the propaganda department's arrangement, this news has been muted. Although you know the figure is close to the fact, but there is no way to communicate with readers. How serious is the problem? The real reason the cause is unknown.

Jian Tianlun observes that the top Chinese families often possess huge undisclosed properties.  The figure provided by Peking University is underestimated. 

Jian Tianlun: “This certainly excluded cash that corrupt officials had embezzled. Because embezzled money is illegal, is impossible to be accounted in. For example, after Zhou Yongkang's arrest, we know he possessed over 300 homes in Beijing. Officials similar to Zhou have tens of homes, there are many, so, empty homes and ghost towns exist everywhere in China. This is why less than 1 percent of people seized so much assets.”

Jason Ma points out that Gini index is 0.73, indicating the wealth gap is seriously wide. This kind of society doesn't have any stability. 

RFI says that according to theory of Deng Xiaoping, former Chairman of Central Military Committee, the reform is unsuccessful.

Jian Tianlun: “This actually was caused by China's entire system, direction of reform and reform policy. It was Deng Xiaoping that let part of the population get rich first, and letting the rest support the rich, so the gap widened gradually.” 

Jason Ma: “The more one gets close to the people who have power, the quicker one gets rich. Once the people with power got rich, they would have their social interest firmed. Actually this is an economic development model of an extreme polarized society.  This society is totally unstable, they just diverted the CCP's crisis onto the entire nation.” 

Jason Ma says that since 2003, the statistics bureau announced Gini index was 0.47 or 0.48. This time allowed figure 0.73 being disclosed, showing that at least one faction at high-level understood that they cannot cover their eyes to live. 

What the final reaction of the high-level would be? If the figure 0.73 caused a strong social response, would the CCP come out to deny the rumor? We will see.

Source: NTDTV