How safe is China to live alone

China eradicated poverty. Really?

Achilles' heel of the system: inequality in China

In an article published in early 2021 for the journal Foreign Affairs, the economist Branko Milanovic, a globally recognized inequality researcher, called inequality the “Achilles' heel of the Chinese system”. It contradicts the socialist principles upheld verbally by the party and undermines the tacit agreement between the rulers and the ruled. The reason for the high degree of inequality is not only the rapid economic growth and the associated rapid urbanization, but also the peculiarities of the political and economic system, which, for example, have promoted the significant disparities between the provinces and between rural and urban areas. China's Gini coefficient (a measure of unequal income distribution ranging from 0 to 1) is around 0.47 (USA: around 0.41, Germany 2018: 0.29); Inequality in China is thus higher than in the USA and considerably higher than in Germany. In particular, the gap between urban and rural incomes is very high. One could almost get the idea that these are two different countries, said Milanovic.

China's inequality has not only structural, but above all political reasons. Both rampant corruption - which is particularly lucrative for those close to large sums of money that can be embezzled - and membership of the CCP, which can secure very high revenues, are drivers of inequality. Milanovic certifies that Xi Jinping is serious about his anti-corruption campaigns, but predicts that future campaigns will have considerably greater problems. Because political and economic power are beginning to merge in China to form a hybrid political-economic elite that has no interest in fighting corruption and can hardly be dissolved once it has been formed and firmly established.

The strong development of the private sector is also creating new social classes in China. In order to involve them, the government of the one-party state invites them to participate in politics through party membership. But that creates an upper class with both political and economic power, separate from the rest of society and also from the bulk of the CCP's members. Without free elections, such power can only be controlled by a superordinate, independent center. Milanovic: “But there is an ultimate power that resides in a narrow circle of top CCP and government officials who are loyal to their background. This autocratic power can curb the elite's excessive pursuit of financial gain and perhaps even its decadence. China has the choice between two visions: oligarchy or autocracy. "

For the poor in China, whether in the country or in the city, this is not a good alternative.