According to a new report China’s households hide as much as 9.3 trillion yuan ($1.4 trillion) of income that is not reported in official figures, with 80 percent accrued by the wealthiest people, a study showed.
Findings indicate China’s wealth gap between rich and poor, already one of the world’s highest, is even wider than official figures show. China’s households hide as much as 9.3 trillion yuan ($1.4 trillion) of income that is not reported in official figures, with 80 percent accrued by the wealthiest people, a study showed. The money, much of it likely “illegal or quasi-illegal,” equates to about 30 percent of China’s gross domestic product. The “grey income” comes from many sources, including gifts to officials at weddings, profits from land transfers, kickbacks from construction projects, and payoffs from state monopolies such as the tobacco industry
The World Luxury Association, a U.S.-based non-profit association engaged in market research in the luxury space, said in a report last July that spending on luxury products of all types in China has surpassed that of the United States, with wealthy Chinese spending $8.6 billion on luxury goods inside the country.
"This year, Armani expanded by 20 percent in a matter of months [in the Chinese market], while Louis Vuitton and Gucci extended their networks from first tier to second tier provincial capitals," the report said.
It’s estimated that if China continue to grow at a similar pace, the nation will surpass Japan as the world’s largest luxury goods market within five years upping its spending to a staggering bill of $14 billion every year.
The study found that the top 10 percent of China’s households take in 139,000 yuan a year, more than triple the official figures, suggesting that most of the ill-gotten wealth ends up in the hands of the rich. The bottom 10 percent earns 5,350 yuan and the top 20 percent of households account for 81.3 percent of total hidden income.
2 comments:
I was in Beijing a few years ago to do some research and the wealth gap is unbelievable! In the middle of the city, it looks as clean and developed as Paris or Chicago - sky scrapers, luxury hotels etc. Then you drive a half hour away to suburbs around the city and it is the most abject poverty I have every seen in my life.
Have you ever heard of the Hukou, or household registration system, in China? There are essentially two groups of people, rural and urban and you get assigned to either group based on where you are born. China will provide education, housing, employment and healthcare to its citizens, but only in thier registered regions and it is next to impossible to change where you are registered.
The problem with all this is that there are only jobs in the cities. So rural families are forced to choose between no income but state benefits or going to the urban areas and being illegal workers.
Like people in the working class all over the world, the rural workers do what they need to do to survive, so families are split up so that the adults can migrate around the country looking for work. The number of migrant workers in China is estimated to reach 300 million by 2020! As you can imagine, these illegal workers are very easily exploited by their employers (much like latino illegal immigrants in the United States).
So now, thanks to the influx of neoliberal capitalism in the
1980s, the disparities between the rich and poor are greater than any time in China's history. The other horrible part of all this is that the exploitation of the workers has caused the rich to become the super rich, and many people use China's wealthy class as an example of how much better people are living in China since they made a move back towards capitalism.
may thanks for your additional comments and observations
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