China: Rural-Urban Inequality. Economic Overview of China -Second largest economy in the world...
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China: Rural-Urban Inequality
China: Rural-Urban Inequality. Economic Overview of China -Second largest economy in the world behind that of the US -$9.24 trillion GDP, as of 2013 -Huge
Economic Overview of China -Second largest economy in the world
behind that of the US -$9.24 trillion GDP, as of 2013 -Huge growth
since the open reform policies of the 1970s (Deng Xiaopeng)
-Interesting interplay of autocratic government with some
free-market principles -Mostly industrial based, though service
industries in China are growing -latest areas of growth: food
service, healthcare, e-commerce, cloud computing -Many Chinese
businesses remain partially or fully owned by the state, 155,000 as
of 2014 -Development abroad includes significant interest in Africa
and growing interest projects in Latin America (particularly the
mining industry)
Slide 3
Economic Inequality -As of one year ago, income inequality in
China surpassed that of the US -2012 GINI Coefficient of 0.474,
worse than Peru, Philippines -According to a 2012 University of
Michigan study, the wealth gap doubled between 1980 and 2010 and is
now considered severe -Questions here about Chinese growth vs.
sustainable development -Number of Chinese millionaires has
increased nearly an average of 5 percent over the last decade or so
-There is one facet of this inequality that is clear: the country
gets wealthier from west east
Two smaller sub-points to consider: -Chinas largest cities are
in the east -8 of 10 largest are located on the extreme eastern
half of the county: (Shanghai, Beijing, Tianjin, Guangzhou,
Shenzhen, Dongguan, Hong Kong, Hangzhou) -Indicative of
development: people tend to migrate internally towards
opportunities in cities; often rural sectors are left behind -Major
ports and water access -6 of the 10 busiest ports in the world on
are Chinas east coast -US, on the other hand, has two major coasts
with major cities and concentrated wealth
Slide 6
Diving Deeper -Data from 2012 actually suggest that rural
workers on the coast are actually much better of than their peers
further west -Potential factors for west/east wealth gap: -lack of
quality investment in the west -trade barriers (CCP leaves it up to
every province to create trade laws and tariffs; often trading
inter-province is very difficult)
Slide 7
A Problem to Consider Chinas Household registration system,
Hukou -There is more inequality than reported in eastern cities
because a lot of people there have illegally migrated from the
west. Because they are not registered to do so, they dont count
towards any economic statute in those eastern cities -This leads to
lack of red tape and lack of opportunity and promise for Chinese
citizens of the west; when they more east they can no longer
receive government benefits/assistance
Slide 8
Current Attempts The Chinese government's approach to solving
inequality -The implementation of structural reforms as outlined in
the 3rd Plenum Blueprint is underway. -should lead to slower,
safer, and more sustainable growth--with a focus on innovation and
entrepreneurship -Chinas 12th Five-Year Plan (2011-2015) forcefully
addresses these issues -highlights development of services and
measures to address environmental and social imbalances -setting
targets to reduce pollution, to increase energy efficiency, to
improve access to education and healthcare, and to expand social
protection. -annual growth target of 7 percent signals the
intention to focus on quality of life, rather than pace of growth
-Efforts made by the Chinese government to reform in three key
areas in particular: -cleaning up the house: promoting good
governance through strengthening the legal framework and the
anti-corruption campaign; -cleaning up the air: curbing pollution
and preserving the environment; -clearing the path to even more
engagement with the world, through Chinas further participation in
the multilateral dialogue and through more international investment
and trade.
Slide 9
International Community The World Bank: -As of June 30, 2014,
Bank cumulative lending (IBRD and IDA) to China was about $54
billion for 376 projects. -Concentrated in environment,
transportation, urban development, rural development, energy, water
resources management, and human development.
-http://maps.worldbank.org/p2e/mcmap/map.html?org=ibrd&
level=country&code=CN&title=China Examples...
Slide 10
Gansu Rural-Urban Integration Project Improve Rural Roads and
Highway Management -$300 million in loans from the WB -Benefitting
hundreds of thousands in Western China -Rebuilding roads and
bridges connecting 48 villages where most live below the poverty
line -The project will make it faster and safer for villagers to
travel or transport goods to cities, and thus help reduce the
rural-urban poverty gap -Lack of all weather transport
infrastructure impedes economic development -Only 43% of roads in
village are paved
Slide 11
Sichuan Chongqing Cooperation Guang'an Demonstration Area
Infrastructure Development Project -275,000 residents in Chinas
Sichuan province will have access to better infrastructure services
-$100 million for basic urban infrastructure in Linshui County and
Qianfeng District of Guangan Municipality -Storm water drainage,
pipelines and treatment facilities, and green transport corridors
-Strategic environmental and social impact assessments, improve the
planning and management of capital investments and municipal
assets, and develop investment promotion services. It will also
provide industry skills training for low-income residents.
Slide 12
Hebei Rural Renewable Energy Development Project Increase
Access to Biogas in Rural Areas -$71 Million load from WB to invest
in the installation and operation of six biogas facilities -Convert
crop residues and livestock manure to biogas -Provide stable, clean
energy to local rural residents -Production of crop residues and
livestock manure, and use of coal for cooking and heating by rural
residents -Worsened air and water pollution -Wheat, corn and cotton
production alone generates about 61.8 million tons of crop residues
every year -Livestock farms generate about 30.7 million tons of
manure -Contaminates water/food supplies - 96,100 rural households
in Chinas Hebei Province will gain access to clean, easy-to-use
biogas for cooking
Slide 13
Proposed Solutions 1.Invest in Education 2.Invest in
Healthcare/ Infrastructure 3.Monitor Government Spending 4.Reform
the Hukou System
Slide 14
-Human capital approach - education is an investment in the
future -more primary and secondary schools will create a more
productive country in the future -Implement policies to reduce the
amount of children doing field- work instead of going to school
-Create more schools - often times schools are too far away for
students so they do not attend or miss a lot of school -Require a
high school education for all children -High school is usually the
financial burden of the parents. Many rural parents cannot afford
to send their children to high school -Invest in higher education
in rural areas Invest in Education
Slide 15
Invest in Healthcare/Infrastructure -Increase public funding
for hospitals o Better technology o Match the quality of service to
that in urban areas -Focus on distribution of healthcare services o
More doctors and hospitals in the West -Create more railways and
transportations systems in the West o Qinghai-Tibet Railway -
proved to be successful o Transportation helps minimize the
inequality gap by providing more opportunities for those in the
West - easier commutes
Slide 16
Monitor Government Spending -Cut down on lavish government
spending -Implement spending limits for government officials -Crack
down on corrupt government officials -Use savings to invest in
rural areas -CPP released On Deepening the Reform of the System of
Income Distribution - focus on reforming the salary income of
government officials and executives - May be very difficult to
accomplish
Slide 17
Reform the Hukou System -Reform the Hukou system to include all
Chinese citizens no matter their location - include western
citizens who have moved east for work - stop bans on rural to urban
migration -Extend government benefits and social security to
citizens in the west -Allow migrant workers to still keep land
rights
Slide 18
Works Cited "China." Worldbank.org. Web. 20 Apr. 2015.
Schiavenza, Matt. "Mapping China's Income Inequality." The
Atlantic. Atlantic Media Company, 13 Sept. 2013. Web. 21 Apr. 2015.
Chen, Sharon. "China's Income Inequality Surpasses U.S., Posing
Risk for Xi." Bloomberg.com. Bloomberg, n.d. Web. 21 Apr. 2015.
"Income Inequality in China and the Urban-rural Divide."
Journalists Resource. N.p., 19 Aug. 2014. Web. 21 Apr. 2015. Chinas
Education Gap A Surprising Factor in Rural Poverty Project Partner.
Web. 20 Apr. 2015. Economic Growth and the Geographic
Misdistribution of Health care resources: Evidence from China,
1949-2010 China Economic Review. Web. 20 Apr. 2015. Poverty in
China: Inequalities, Migrant Workers & Access to Education May
2012. Web. 20 Apr. 2015 Chinas income gap solution: Too little, too
late? Fortune. Feb 15 2013. Web. 20 Apr. 2015. "World Bank - Global
Reach." World Bank - Global Reach. Web. 22 Apr. 2015.. "Press
Release: IMF Managing Director Meets Senior Chinese Officials,
Speaks at 2015 China Development Forum." Press Release: IMF
Managing Director Meets Senior Chinese Officials, Speaks at 2015
China Development Forum. Web. 22 Apr. 2015.. "News." Hebei to
Increase Access to Biogas in Rural Areas with Help from World Bank.
Web. 22 Apr. 2015..