Massive wealth disparities must be addressed forcefully
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How did billionaires' wealth grow so rapidly in the past 10 years? The main reason is the robust economic development in China, which created two new channels to distribute social wealth. Since the housing-market reform in 1998, real estate transactions have become a major way to collect social wealth. The capital market, especially the stock market, is another incubator of the rich. One year after ChiNext, a NASDAQ-style growth enterprise board, was launched, hundreds of millionaires cropped up across the country.
But real estate and stock markets are not unique to China. The reason for such rapid high-wealth growth is that these markets are led by the Chinese government. In the real estate industry, the hand of government can be found everywhere—from land-use planning, land purchasing, tax collection, infrastructure construction, and project development. China's current IPO approval system puts enormous power in the hands of government officials.
Due to the country's special economic structure, the role of government power is unrestrained. This will inevitably result in abuse of power and corruption, and the majority of social wealth will go to a small number of people, who become disproportionately rich so quickly.
If government power over economic development remains unchecked, the wealth gap in China will be further exacerbated, and the country will suffer severely strained social stability. Let the Hurun "Rich List" teach us a valuable lesson that leaders heed sooner rather than later.
(The article was translated by Chen Xia.)
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