Widening income gap in China


The Wall Street Journal ($link) highlights the extensive recent domestic Chinese press coverage of growing social and political tensions arising out of the sustained rapid economic growth China has experienced.

If the hand—wringing about income inequality in China translates into policies that will penalize hard work, talent and risk—taking, or get in the way of reform, the answer could be yes. If, on the contrary, the social resentments generated by Communist Party corruption and cronyism are addressed, China could have a useful debate.

So far the state—controlled media has not taken sides. Stories on the widening income gap that appeared simultaneously on Wednesday in People's Daily, the party organ, and on the state—controlled Xinhua news agency, tell us that the official media have been given their marching orders. President Hu Jintao's and Prime Minister Wen Jiabao have chosen to bring this touchy issue out into the open.

The Journal reinforces the point I made in an August AT article, that frequent domestic outbreaks of rioting (usually unreported here) betray a serrious vulnerability to regime collapse, a concern of which China's leadership is highly conscious. Ameirca's diplomatic and strategic posture toward China must take into account the weakness of the regime, and use it carefully and cleverly to achieve our own diplomatic goals.

Hat tip: Ed Laksy

Thomas Lifson   9 23 05