For China, Economic Growth Doesn’t Always Equal Happiness

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A woman washes clothes next to a railway near a shantytown in Shenyang, China

When Bo Xilai, the rising Chinese Communist Party official who was purged in March, gave his last public comments before disappearing into detention, he was wrong about a lot of things. That bit about not being under investigation, for instance. But one line he uttered has the clear ring of truth, and it poses a serious issue for China’s leadership as it attempts to navigate this year’s political transition, the economic slowdown and the ripples loosed by Bo’s removal. Bo revealed that China’s Gini coefficient — a statistic that measures the gap between rich and poor — had entered into worrying territory. He described the number, which hasn’t been made public in more than a decade, as over 0.46. Anything higher than 0.4 is considered dangerously high and capable of fueling unrest.

In Chongqing, where Bo was Communist Party secretary for 4½ years, he made building economic protections like subsidized housing for the megacity’s poorest residents one of the tenets of his “Chongqing model.” The wholesale corruption he and his family have been accused of may have steered the wealth gap in the wrong direction, but Bo understood the political importance of appearing to care about the problem, just as he knew the appeal of cracking down on crime and reviving Mao-era culture.

It’s a point that many other officials seem to have missed, mindful perhaps of Deng Xiaoping’s declaration that “some will get rich first,” but forgetting the coda that their prosperity would then spread to all. China’s growth in recent decades has been astonishing, and surveys like the Pew Research Center’s Global Attitudes Project have found high levels of satisfaction and optimism in China. But there is more to those numbers. A deeper examination of Chinese citizens’ levels of satisfaction indicates that while the country’s richest are increasingly content, the poor are growing more and more unhappy.

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That’s one of the conclusions of a new paper by a team from the University of Southern California headed by economist Richard Easterlin and published in the latest issue of the Proceedings of the National Academy of Sciences (PDF copy here). The group looked at several surveys of personal happiness in China dating back to 1990 and found that overall there was little change and perhaps even a decline when the past two decades are considered as a whole. The 1990s in particular saw a significant decline, which the authors say mirrors the unemployment rate as state-owned enterprises laid off huge numbers of workers as part of economic reforms. Following a 2000–05 trough, happiness numbers rebounded to somewhere at or below early 1990s levels. They write:

Despite an unprecedented rate of economic growth, China’s life satisfaction over the past two decades has largely followed the trajectory seen in the central- and eastern-European transition countries — a decline followed by a recovery, with no change or a declining trend over the period as a whole. There is no evidence of a marked increase in life satisfaction in China of the magnitude that might have been expected based on the fourfold increase in the level of per capita consumption during that period. In its transition, China has shifted from one of the most egalitarian countries in terms of distribution of life satisfaction to one of the least egalitarian. Life satisfaction has declined markedly in the lowest-income and least-educated segments of the population, while rising somewhat in the upper (socioeconomic status) stratum.

While China’s poorest are increasingly unhappy, it’s unlikely that the country will see Arab Spring–like unrest and revolt. The problems are too diffuse and the state security organs too adept at clamping down on acts of dissent that have the potential for wider appeal. But on a local level, protest is widespread, averaging about 500 a day nationwide, according to economist Niu Wenyuan, an adviser to China’s State Council. Last week, a suicide bombing tore through a government office in the southern province of Yunnan, killing four. The culprit and the motivation behind the attack have been subject to widespread debate online, but the target — a bureau where residents received compensation for demolished housing — has fueled the belief that the attack was driven by anger over forced relocation. China may be getting richer by the day, but there is plenty of anger too.

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