Massive wealth disparities must be addressed forcefully

By Yi Peng
0 CommentsPrint E-mail, October 25, 2010
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The Hurun Research Institute released this year's "Rich List 2010" recently. The most striking aspect is not the identity of the richest individual in China, but the accompanying statement that reports near equality in the number of billionaires in China and the US.

Given the fact that the per-capita GDP of China is only one fifteenth of that of the United States, the statement is alarming and reminds us of China's significant wealth gap.

The rapid growth of China's super rich is even more striking. It took the US 100 years to have so many billionaires, while it took China only 10 years. This is another miracle of China, but this one brings no good results but only exacerbates an increasingly large wealth gap.

When a country distributes its social wealth, it's reasonable for it to make some classifications, because in theory, people with greater capabilities will make better use of social wealth and resources to create further wealth for society. Yet, the classifications must be kept to a reasonable degree. Otherwise, it will undermine social stability.

Over the past 10 years, the Gini coefficient in China has kept rising and reached a record high of 0.5, which means the country has got one of the world's largest income gaps. This is far beyond reasonable and imposes mounting pressures on maintaining social stability.

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