Wealth and Poverty, Expectation and Reality: A Guiyang Reader Comments

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Some interesting comments by guiyang laoshi on the millionaires vs. “thousandaires (see post below; it is an ugly coinage. my apologies) issue. First on the danger to social stability he (she?) says:

China’s economy is a case of a rising tide lifts most boats. While the number of absolutely poor has declined by breathtaking levels the real danger lies in the “thousandaires.” It is not poverty that breeds discontent; it is unfulfilled expectations. Although all incomes are rising, the fact that they rise more slowly in rural areas and the center-west of the country is dangerous for
social stability.

That is spot on. In fact, it is a commonplace among historians that revolutions do not happen because of repression but because expectations have been raised and disappointed. Look at North Korea. Keep ‘em down on the farm and they don’t know any better. But dangle the bright lights of Hong Kong/Shanghai etc in front of them on TV and then tell them to go back to the pigsty, that’s when you’ll really run into trouble.

Secondly, on the chances that Hu Jintao’s real concern (if only because of self-preservation) to spread the wealth and correct income inequalities will succeed:

I believe Hu Jintao when he voices concern about the income gap and wanting to support China’s poor. Unfortunately the decision to help is not his to make. Economic decision making in China is determined at the provincial level and below. When one level of the bureaucracy cuts taxes or changes benefits, they are adjusted in another area such that the net effect on the poor remains essentially nil. China has a long way to go. Let us hope the new crop of fabulously wealthy, having benefited so much from economic reform will see fit to give back and share the wealth.

Actually, this will be fascinating to watch over the next five years. As I have written elsewhere, this seems to me to be the crux issue for China. Hu is a shrewd politician and it’ll be instructive to see how he goes about trying to get provincial officials to fall into line. The usual fear and greed most likely. As the good professor says, the efforts have been largely ineffective so far. But if China’s huddled masses have to rely on philanthropy of the newly rich they could be in trouble.