The Gap Between the Wealthy and Poor in China - Essay Example

Zongheng Liu GEO 101 H D Ashley Tinney 02/10 The Gap Between the Wealthy and Poor in China Introduction The gap between the wealthy and thepoor, which could also be called the economic disparity is a situation involving a section of people in a society (the wealthy) possessing and controlling more resources than other people (the poor). This disparity gives the wealthy an upper hand in accessing and controlling more resources. On the other hand, the disparity draws the little resources from the poor due to social prejudice, information asymmetry and the absence of economic empowerment. The income inequality is partially influenced by the geographical location of a Country. The influence is caused by the different political, social and economic alliances of a country. These alliances, which are between a local and foreign countries affect policy formulation and implementation process. Second, the alliances also affect the trade practices, the Gross domestic product and the per capita income of Countries. Third, these alliances affect the social and economic developments in a country. The following are the global effect of income disparity; health problems, social problems, low quality and rates in social goods, under-utilization of economic resources and stagnating economic levels. The case study China, located in the east of Asia, is a big country with 9,600,000 . China has the largest population in the world of approximately 1.351 billion as of the year 2012’s results. China is experiencing a rapid growth in Both gross domestic product, but its per capita income is still low (26,955 Yen as of December 2013) as compared to that of the developed countries. This places the country under the developing countries. This briefing paper focuses on the wide gap between the Wealthy and the poor caused by the population influx in China. From a global point of view, China is the third largest country in terms of area and the most populated country in the world. Taking into account the wide gap between the wealthy and the poor in China, In the global platform, Chinese Yen exhibits one of the weakest currencies with a lower purchasing power than any other currency. For this reason, most Chinese avoid the transaction complications caused by the weak purchasing power through purchases in the international markets such as the United States and the European countries (Kim par 3-9). The Chinese education sector also faces the a huge migration of students to the foreign institutions. The tuition fees at these institutions are high and is only affordable to the rich families. The number of students pursuing their studies in overseas are over 270,000 each year. The number has been increasing due to a higher chance of employment for students who have attained their degrees in foreign institutions. It is so unfortunate that the income inequality is adversely affecting the local students as they hardly afford enough meal let alone a well balanced diet. The mentioned is one of the biggest challenges facing China. The income inequality in China is so large that out of 1.351 billion population, 98.99 million people live below 2,300 Yen annually (China Overview par 3.5). The following are the geographical issues affecting the Chinese: first, the location influences the countries surrounding China. The location, therefore, affects the countries that politically and economically relate to China. For this reason, a strong political and economic ties exist between China, Japan, South and Noth Korea. These foreing relations greatly influence policy implementation in China, thus, economic performance. The terrain in China is composed of mountains (the greatest portion), plateaus, hills, deserts and deltas. For this reason, the settlement pattern is concentrated in particular habitable regions. These patterns of settlement has greatly contributed to the ever increasing population size. The birth rate in China is estimated to be 12.17 births/1000 population. Conversely, the death rate is 7.44 deaths/1,000 population. The population growth rate in China was estimated at 7.8% annually with a life expectancy of 73.49 years. The mentioned geographical issues have contributed to the population influx in China and thus, exacerbated the income inequality. Below is the map of China and the surrounding countries (The World Factbook). Source: World Factbook Most rich families in China fear appearing before a camera or interviews due to fear of exposing the story behind their fancy life style wealth acquisition strategy. Rich Chinese have reason to be shy of the cameras and interviews. The country’s new leader, Xi Jinping, has told people to cut out displays of ostensible life style. Moreover, the spending habits of wealthy Chinese have often sparked the ire of China’s micro-bloggers. Therefore, it can be concluded that rich people in China are not very friendly to the poor due to their pride and arrogance. Actually, the wide gap is totally from the society. In disparity to reports of 130 billionaires thriving in China, and an assertion by the Chinese Government that the GDP grew 8.7 percent over the past year, China’s Director of Statistics reported that 150 million Chinese are still living in abject poverty. The growing gap between the rich and the poor is a potential cause of security threats and social instability (Li par 5-12). The Chinese are convinced that the income inequality has been contributed by a reduction in salary and remuneration policies. This includes the level of salary and the benefits to the employees. The popular response from the Chinese regarding the altered income distribution pattern is anger. Most Chinese are dissatisfied with the outcomes of the centrally planned socialist regime. From the economic point of view, the industrialization strategy in China overlooked the agricultural sector, thus creating an income disparity between urban and rural residents. Despite an increase in China’s GPD, the income disparity has also been a major challenge (Income Disparity in China and its Policy Implications par. 1-3). The Chinese government has responded to the income disparity by proposing an increase in the minimum wage to 40% of the standard metropolitan wage. The government hopes that this policy will assist in reducing the income gap between the rich and the poor (Astont par. 1). Lastly, the following are the cultural effects of income disparity in China: a decrease in life expectancy level; increase in teenage drug abuse; deteriorated health condition in children; and a reduction in social mobility (Wilkinson par. 1-8) According to Li, the levels of income inequality in China are so high that the manifestation is noticeable in the change in the social stability as compared to the situation in Russia, Japan and the U.S. Official figures show rural incomes are less than one-third those in cities, with the top 10 percent of urban Chinese earning about 23 times that of the poorest 10 percent. Li thinks that this ratio is understated. Roberts (par 4-8) states that the increasing income disparity is experienced in every corner of China. This proves that the income disparity in China is the first reason behind the increasing gap between the rich and the poor. Reducing the gap will need the implementation of income redistribution strategy, which are never easy to achieve. Therefore, the Chinese government will require more time and effort to transform the income distribution pattern in China. Unfortunately, rich people never get enough and would do everything possible to keep the gap wide. This is another challenge to reducing the income disparity (Roberts par 4-8) Word Count = 1,214 words. Works Cited Roberts, D. n.d., n. pag.. Wilkinson, Richard 2011, Why inequality is bad for you and everyone else. Web. 5 April 2014 < http://www.cnn.com/2011/11/06/opinion/wilkinson-inequality-harm/>. Cheng, Fuzhi 2007, Income Disparity in China and Its Policy Implications. Web 5 April 2014. . Kim, Kyung-Hoon. N.p., n. d. 22 Feb 2014. . Li, Yuanhan, ed. N.p.. Web. 23 Feb 2014. . China Overview 2014. Web 4 April 2014. < http://www.worldbank.org/en/country/china/overview>. The World Factbook n.d. Web 5 April 2014 < https://www.cia.gov/library/publications/the-world-factbook/geos/xx.html>. Astont 2013, China’s plan to fight inequality. Web. 5 April 2014 . Read More