Gap between rich, poor worse in China than US, study shows

Bloomberg

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The income gap between the rich and poor in China has surpassed that of the U.S. and is among the widest in the world, according to a report.
A common measure of income inequality almost doubled in China between 1980 and 2010 and now points to a “severe” disparity, according to researchers at the University of Michigan. That conforms to what many Chinese people already say they believe -- in a 2012 survey, they ranked inequality as the nation’s top social challenge, above corruption and unemployment, the report found.
“Chinese recognize income inequality as a serious social problem; on the other hand, they seem to have high tolerance for income inequality,” said co-author Yu Xie, a sociology professor and a researcher with the university’s Institute for Social Research in Ann Arbor, Michigan. “They don’t like it, but they seem to accept it as a fact of life. Something they have to pay for fast economic growth.”
Using data from six surveys conducted by five universities in China from 2010 through 2012, the researchers calculated a measure of income inequality, the Gini coefficient, and compared it to earlier estimates.
In 2010, the Gini coefficient for family income in China was around 0.55 compared with 0.45 in the U.S. In 1980, the gauge in China was 0.30. A coefficient of 0.5 or higher indicates a severe gap between rich and poor, according to the report, which also said the Chinese government stopped releasing the data in 2000 when the gauge reached 0.41.
Gini coefficient
A reading of zero means all income is evenly distributed and 1 represents complete concentration.
“Since the 1980s, the rise of income inequality has been far more dramatic in China than in the U.S.,” the researchers wrote.
The growing gap has coincided with decades of rapid economic development in China. Government policies that favor urban over rural residents and coastal over inland regions have contributed to the gap’s rapid growth in China, the report found.
China is minting more millionaires than any other emerging economy, according to a 2013 Asia-Pacific Wealth Report from Capgemini and RBC Wealth Management, which put their ranks at 643,000, up 14.3 percent from 2012.

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