Chinese capitalism

Chinese Premier Wen Jiabao this week opens the annual gathering of the National People’s Congress. The richest 70 of the 2,987 members have a combined wealth of 493.1 billion yuan ($75.1 billion), and include China’s richest man, Hangzhou Wahaha Group Chairman Zong Qinghou. The Congress is the highest state legislative body and meets to approve government economic and fiscal plans. “The biggest problem to passage of the property tax is the People’s Congress,” said Huang, a professor at the Lee Kuan Yew Center for Public Policy. “How can you expect those rich people to represent the interests of people who need help?”

Zong, a Communist Party member whose wealth is put at $12 billion, told reporters he believes higher taxes and extensive welfare-benefit programs, such as those in Europe, sap energy from entrepreneurs. “Rich people are investing their money, creating more jobs. If rich people all get killed, nobody is going to invest or build factories, there will be no jobs.” [now , where have we heard that old story before]

Chinese activists inspired by the pro-democracy movements in Tunisia and Egypt have called for nationwide protests, which led to an increased police presence in Beijing, Shanghai, Guangzhou and other cities last month. The activists say the Communist Party should give up power if it doesn’t address the wealth gap, promote an independent judiciary, curb inflation and property prices, and crack down on corruption. Accelerating inflation and rising property prices have undermined households’ spending power. Consumer prices have exceeded the government’s 4 percent target for 2011 in each of the past four months. Slums have emerged in the suburbs of cities from Beijing to Guangzhou as migrant workers and cash- strapped urban youth seek an affordable place to live.