Essays on China: Gap between the Rich and the Poor Case Study

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The paper "China: Gap between the Rich and the Poor" is a perfect example of a case study on maco and microeconomics. China has been in the international scene for some time now pulling out tremendous performance in terms of economic growth and industrialization. The country has witnessed great industrial developments in the recent pasts proving itself a major economic powerhouse in the international scene. Of great concern however has been the persistent and growing gap between China’ s super-rich city dwellers and the poor rural agriculturalists, with this subject being the centre of discussion of several debates.

Picking up the debate, this paper discusses the possible reasons behind this economic inequality and the reasons why this gap may not be eliminated soon. The gap between the Rich and the PoorThe economic gap between the rich and the poor in China has been a subject of discussion both in the Chinese government as well as the international community. The government recently released statistics showing a great gap in terms of income between the two groups of citizens after keeping it a secret since 2000 (VOA News, 2013).

In estimating this gap, the National Bureau of Statistics used a standard of measure called the Gini coefficient. The standard which ranges from 0 (for perfect equality) to a maximum of 1 (for total inequality) showed China’ s coefficient at 0.474. This placed the country among the world’ s most unequal countries. The flourishing economy has resulted in few entrepreneurs making billions and has seen some Communist Party officials live in luxury while the majority of the Chinese population experiencing little or no growth in their income (VOA News, 2013). While the government has expressed its desire to minimize this gap, the reasons why it came to exist remain unaddressed, and the different measures in income remain to present a big challenge.

The ridge between the rich in the cities and the poor in the rural areas has been increasing since the 1990s. Together with official corruption, inequality remains a major cause of the social unrest witnessed in the country. In China, there are over 2.7 million millionaires, with some 251 billionaires, all these figures in US dollars. Surprisingly, about 13% of the population lives on no more than $ 1.25 per day, as reported by the United Nations data (Yin, 2013).

Yet, the average annual income is about $3,500 in the cities.

References

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Yuanhan L. & Ping Z., (2010). Gap Between Rich and Poor Widens in China. Retrieved on 13th September 2013 from

Meng, X., Gregory R., and Want Y. (2005): Poverty, Inequality, and Growth in Urban

China, 1986-2000.Journal of Comparative Economics, 33(4), 710{729.

Yin S. C., (2013). In China, a Vast Chasm Between the Rich and the Rest. Retrieved on 13th September 2013 from

Walker A., (2013). China's great growth means widening gap between rich and poor. Retrieved on 13th September 2013 from

VOA News (2013). China Reveals Economic Gap Between Rich, Poor. Retrieved on 13th September 2013 from < http://www.voanews.com/content/china-reveals-economic-gap- between-rich-and-poor/1586295.html>

Candelaria C., Daly M. & Hale G. (2013). Persistence of Regional Inequality in China. Retrieved on 13th September 2013 from < http://www.frbsf.org/economic- research/files/wp2013-06.pdf>

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