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Resentment rises with widening wealth gaps

 IPS 18 October 2019

In the rich depository of Chinese expressions dealing with the issue of unrest, none is more sensitive than the word ‘qiyi’ or rebellion. After all, Chinese imperial dynasties have lost mandates because of peasant rebellions and the mere mention of the word in China brings associations with calamitous change. (1099 Words) - By Antoaneta Becker

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IPS_Resentment rises with widening wealth gaps

 Chinese ask where equality is, as the gap grows between the have and have-nots. Photo: Antoaneta Becker/IPS

But this explosive word is now gaining currency, at least with some strata here in the capital of the world's second largest economic powerhouse.

On a recent autumn afternoon, while the cream of China's nouveau riche was clinking champagne glasses with visiting U.S. billionaires Bill Gates and Warren Buffett in a French- style chateau in Beijing suburbs, peasants from the villages around were grumbling about their lot.

"They have taken our land to build this mansion. Land is all we had but they don't count their money and houses," says Xiong Shaoping, who repairs bicycles for a living. "People are angry because this is a communist country and we should be equal. If things don't change, there will be a rebellion and people like me would want to have their share too."

Xiong does not feel the need to elaborate as to who "they" are. China's new rich have no qualms about flaunting their wealth. They drive Rolls Royces and Bentleys, live in gated compounds, buy luxury watches in bulk and can be seen flanked by bodyguards.

There are 875,000 millionaires - in U.S. dollars - in the communist paradise with an average age of just 39, according to an annual Rich List compiled by the wealth analyst Hurun. China has the world's second largest population of millionaires after the United States. About 130 Chinese rich are worth more than 100 million dollars.

Nowhere is this wealth seen more clearly than in China's skyrocketing demand for luxury goods. In 2010, the People's Republic overtook the United States to become the second biggest market for the luxury sector, and by 2015 it is expected to overtake Japan.

Most of this money was made during the past 30 years, after China embarked on economic reforms. The rich got richer as Mao Zedong's egalitarian society evolved from a society based on shared wealth to one where money is concentrated in the hands of a few.

Bitterness toward the rich is palpable in China these days. Whether they belong to the red capitalists - the offspring of communist revolutionaries and senior party officials - or the new rich, the economic elite is regarded with suspicion and resentment.

Reports in domestic media outlets suggest that 0.4 percent of the country's 1.2 billion population possess 70 percent of the nation's wealth. What is more, the economic elite are believed to be hiding grey income amounting to 9.3 trillion yuan (1.39 trillion dollars), an amount equal to 30 percent of China's 2008 Gross Domestic Product.

Wang Xiaolu, economist with the National Economic Research Institute in Beijing who conducted the grey income study, holds that such income comes from bribes, embezzlement of public funds and favours from businesses and industries.

There is no limit to the appetite of the new rich. Chinese business newspapers feature investment advice for people who want to purchase chateaus with vineyards in French Bordeaux and guides to prime properties on the market in London and New York.

But those who sell these newspapers earn a meagre 900 yuan (134 dollars) a month, and are quick to give their verdict on the current state of society. "Guofu Minqiong - rich government, poor people", says Er Ni, peeping out of the window of her small kiosk in downtown Beijing. "Those who have money can buy any favour and for them everything is possible. We can only read about some things in the papers."

This reality of cheating and paying for favours is made plain at one of Beijing notary offices, where a woman eager to skirt the bureaucratic maze in registering her third property says: "I'm only afraid of things that one cannot buy with money."

Increasingly, the belief that everything needs to be aided with bribes is corrupting just about everyone's psyche. One can no longer simply assume that public officials on duty will do their job unless they are persuaded to do so.

"I used to bring boxes of mooncakes (traditional pastries to celebrate the Mid-Autumn Festival) around at this time of the year to get things done," says Chen Xueli, a real estate agent queuing at the notary office with her clients. "Now I need to bring envelopes with cash."

A lot of the social tension in Beijing stems from the grudge that ordinary people have about not being able to afford to buy housing. In the last two years, property prices in first-tier cities have skyrocketed, driven by excess liquidity and lack of investment alternatives.

A recent survey by the Chinese Academy of Social Sciences (CASS) found that 85 percent of urban families could not afford an apartment. But a small proportion of the population owns several houses and is engaged in feverish property speculation.

"It is not only property they are gambling on. There are now speculative bubbles in the art market and in the antics too," says Mary Huang, who works in the auction business. "If we now hold a small-scale auction, we can easily earn 400 million yuan (59.7 million dollars). I think it is too unrealistic to last."

After flooding the economy with stimulus money to ride out the financial crisis, authorities seek to limit the damage and minimise the risk of asset bubbles bursting, lest a collapse in property prices drag the economy down and cause mass unrest.

Some observers say reversing that the trend of widening income gap and averting an uprising should be top leaders' foremost priority.

In September, President Hu Jintao said China supports the concept of "inclusive growth", first pioneered by the Asian Development Bank in 2007. Unlike China's rapid since the 1980s, inclusive growth must benefit the poor and allow income redistribution.

But measures to squeeze wealth from the rich are likely to be met with harsh resistance from different interest groups.

"In the West, they say the rich are powerful. But in China those in power are in fact those in possession of the biggest riches," argues Ding Xueliang, political scientist at Hong Kong School of Humanities and Social Science. "How do you go against such a powerful group of people that control all resources in the country?"

Originally published by Inter Press Service. © www.streetnewsservice.org

 

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