Ostensibly, China’s rapid growth over the past three decades should have brought economic benefits to both urban and rural communities. Granted, economic disparities would exist (and probably become greater) with continued growth; however, as Dr. Damian Tobin puts it, China’s widening gap between rich and poor represents, “one of the most fascinating contradicitons of China’s rapid growth under the auspices of the communist party.” Undoubtedly, the privatization of state enterprises has been an important driver of wealth creation, but this wealth has not been evenly distributed across both urban and rural communities (as clearly illustrated in Peter Hessler’s Country Driving: A Chinese Road Trip).
Dr. Tobin says further that, “such inequalities also highlight a contradiction in that although the monetization of previously state-owned assets undoubtedly benefited many of China’s emerging middle class, it ultimately came at a cost to the public who would now have to finance these goods and services out of personal savings.”
Clearly, wealth inequality is not a problem exclusive to China, as the U.S. has been fighting a widening income inequality gap for some time; however, China has now surpassed the income inequality gap seen in the U.S. In 2010 rural residents had a per capita disposable income that was less than a third of that seen in urban areas.
This expanding gap between income in urban and rural areas begs the question: is continued overall growth worth drastic increases in income inequality? Ultimately, continued economic growth in China should translate into benefits in rural communities, and the Chinese government has demonstrated that recognize this is an issue that needs addressing. “Since 2004 it has worked to raise minimum wages for migrant workers, improve rural incomes through tax cuts and enforce labor contract law.”
Source (text and media):
Tobin, Damian, Dr. “Inequality in China: Rural Poverty Persists as Urban Wealth Balloons.” BBC News. 29 June 2011. Accessed 26 Jan. 2015.