126. Reality of China: Poverty, Inequality, and Corruption

The Reality of Communism in China: Poverty, Inequality, and Corruption

Aug. 14, 2020 | By Shi Chuan(Minghui.org)

Some people in Western society were misled by the claim that communism is a system of equality despite its tyrannical ruling. When looking into facts and uncensored statistics, however, one would find it a brewery of poverty, inequality, and corruption.

Below is an analysis using China as an example. I hope it will help people recognize the nature of the Chinese Communist Party (CCP) and distance themselves from the totalitarian regime and its human rights violations and religious persecution.

The Issue of Poverty in China

China Society for Human Rights Studies recently published a report to promote China as being far superior to the United States which was said to see half of the American families struggling to maintain their basic life. The statement is untrue but could mislead Chinese people once parroted through various CCP-controlled news media.

According to per capita nominal GDP for 2019 released by the International Monetary Fund and World Bank, the per capita GPD for the United States was over $65,000 and about $10,000 for China.

Chinese Premier Li Keqiang announced in May that about 600 million Chinese citizens have a monthly income of 1,000 yuan (or $144) or less. A research report published by Beijing Normal University in 2019 supported Li’s claim. The report sampled 70,000 people and inferred that 43% of the population (or 600 million) has a monthly income of less than 1,090 yuan. Among them, 220 million have a monthly income of less than 500 yuan (or $72).

The Number Game of Gini Index

The CCP is known to manipulate numbers to support its narratives. After the Tangshan Earthquake in 1976, for example, Chinese authorities first reported a death toll of 655,000, but later lowered it to 240,000. The sudden drop in the number of coupons distributed (which was a necessity at the time to buy fabric or food), on the other hand, indicated a population decline of at least 550,000 people, a figure that was more on par with the initially announced higher death toll.

Another example was the man-made famine in 1959-1961. The CCP never announced the death toll and in fact treated the topic as a taboo for researchers. Frank Dikötter, chair professor of Humanities at the University of Hong Kong, conducted independent studies and concluded the death toll was at least 45 million in his book Mao’s Great Famine.

Similarly, the Gini index, an indicator of income inequality, also remains a mystery in China. In 1978, China reported a Gini index of 0.3, which climbed to 0.4 by 1994. There was no official announcement of the Gini index between 2002 and 2011. In 2012, the National Statistics Bureau (NSB) abruptly reported all numbers between 2002 and 2012, and claimed the index had dropped from 0.479 in 2003 to 0.474 in 2012.

But these numbers received broad skepticism. In a report in The Atlantic in January 2013 titled “What China’s Newly Released Inequality Data Really Means,” Xu Xiaonian, a professor of economics and finance at China Europe International Business School, was cited as saying these data were like “a fairy-tale that no one would dare to write.” He was further cited as writing on social media, “A journalist called me and asked me to comment on today’s macroeconomic figures. Wouldn’t I be sick in my head to comment on such false figures?”

A Gini index of above 0.4 is often considered inequality that could lead to political instability and social conflicts. After this number reached 0.41 in China by 2000, NBS stopped releasing such data. A research team at the University of Michigan analyzed 7 nationwide surveys in China and calculated Gini indices based on them. The results were published in May 2014 on Proceedings of the National Academy of Sciences (PNAS) with a title of “Income inequality in today’s China.”

Numbers from these 7 surveys ranged from 0.483 to 0.611, with an average at 0.54. Given the information censorship in China, the real number could be much higher. But even 0.54 would put China the highest Gini index among major countries in the world.

“Holding back data have been in the [Chinese] government’s interest, an attempt to avoid drawing attention to a reality that an increasing number of Chinese find frustrating,” reported an article on Quartz in April 2014 with a title of “China is hiding how bad income inequality.”

Corruption: When Cash Is Measured in Tons

The real Gini index could be higher because senior officials have large sums of unreported income. Wei Pengyuan, former director of the coal department at the National Energy Administration, was investigated for corruption in May 2014. Since a large amount of cash was found at his residence, local banks provided 16 money counters, among them 4 were damaged onsite because of the heavy use. In the end, the money was determined to be 230 million yuan (or $33 million).

Lai Xiaomin, a business executive and senior economist, was the Party chief and chairperson of the board for China Huarong Asset Management. Among all the fortune he accumulated through corruption and bribery, some of it was kept in his numerous safes. After he was investigated in April 2018, officials found 270 million yuan (or $39 million) of cash in his residence, with a total weight of about 3 tons (or 6,600 pounds).

Besides high officials, offsprings of senior political officials—known as princelings—also accumulated large amounts of assets, which are deposited both inside China and overseas. Deutsche Welle, a German public radio, reported in April 2012 that 2,900 Chinese princelings owned a fortune of about 2 trillion yuan (or $320 billion at that time). They had controlled many industries, especially finance, foreign trade, and real estate. “Among 3,220 Chinese people with fortunes of over 100 million yuan, only 288 are not offspring of high officials,” wrote the report.

https://en.minghui.org/html/articles/2020/8/14/186337.html

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