Sample Essay on Income Inequality in China

China is one of the leading growing economies in the world today. However, its gap between the poor and the rich has continued to increase and recently overtaken the United States. This disparity is also one of the widest in the world. It therefore remains a major challenge for the Administration of Xi Jinping’s government. According to a survey conducted by the University of Michigan, China’s income inequality almost doubled between 1980s and 2010. This confirms what most Chinese consider the leading social challenge, which is ahead of corruption and unemployment.

This trend in China’s wealth disparity has increased the risk of social unrest in the world’s most populated country and the leading developing economy. While this is the case, the president has initiated measures to reduce the gap through fighting corruption even as he faces other challenges like pollution, credit risks and the ever-increasing credit risks. Other experts believe that the Chinese system is rapidly changing and will massively favor those who take the advantage. This is a common phenomenon in most developing economies and when there are immature, societies and the existing systems do not favor everyone.

The alarming wealth inequality situation in China contrasts that of the United States. According to 2010 findings using Gini coefficients, the figures were 0.55 and 0.45 for China and U.S respectively. In 1990, China had 0.3 even though it stopped releasing the information when the coefficient hit 0.41. Normally, higher Gini coefficient indicates high-income inequality among citizens of a country.

When an economy registers a reading of zero, this would imply that it has an evenly distributed income. Here, the rich and the poor equally enjoy the resources of the nation without huge differences. On the other hand, one shows that there is complete concentration in the economy. Whilst this is the case, many researchers agree that China has experienced dramatic wealth inequalities since 1980s as compared to the U.S. This is caused by major government policies, which widely favor urban growth as opposed to rural development.

China had a Gini coefficient of 0.473 in 2013 as compared to an almost similar figure of 0.474 in 2012. These figures are above 0.4, which according to the United Nations is a predictor of social unrest in any country in the world. Chinese economy favors millionaires, who continue to enjoy its resources, at about 14.3% from the year 2012. To curb this, the government has stepped its efforts to deal with corruption, a campaign that saw the arrest of corrupt officials in government, military and in the business sector.

The government has also broken its silence and arrested micro-bloggers and online commentators who thrive in spreading unfounded nonfactual information about China. It sensors its internet seriously and shuts down websites like FaceBook, where people criticize the government. There has been growing social unrest in the country through factory strikes thus increasing the tension between the government and its absolute poor. As the most populous nation on the planet, China has more to do in dealing with the problem of unequal income distribution. The government should review its developmental policies and lay emphasis on rural development as opposed to concentrating on urban centers. It should have the interests of the ethnic minorities in order to avert a looming social unrest.

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Retrieved from: http://www.bloomberg.com/news/2014-04-28/gap-between-rich-poor-worse-in-china-than-in-u-s-study-shows.html

http://www.businessweek.com/articles/2014-04-30/chinas-income-inequality-gap-widens-beyond-u-dot-s-dot-levels

http://cip.cornell.edu/DPubS?service=UI&version=1.0&verb=Display&handle=dns.gfs/1200428169

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