News

    China's New Wealth Underscores Inequalities

    New surveys of mainland China's wealth show the country has at least 345,000 U.S. dollar millionaires and 108 known billionaires. As VOA's Kate Woodsome reports from Hong Kong, soaring stock and property prices are key factors in this rising wealth - and a major contributor to a growing income gap that has China's leaders worried.

    A 26-year-old woman worth $17 billion is the richest person in China, and in all of Asia. Yang Huiyan achieved her lofty status thanks to her majority stake in Country Gardens Holdings, a real estate development company founded by her father.

    The Shanghai-based Hurun Report counted Yang among its list of China's 800 wealthiest people. Last year, the report listed just 15 U.S. dollar billionaires, but this year, the number has risen to 108.

    The figure means that China now has more billionaires than any other country in the world except the United States, which has more than 300. Forbes magazine, which regularly documents such things, says there are 36 billionaires in India, and 24 in Japan.

    Rupert Hoogewerf, who publishes the Hurun Report, says Yang Huiyan and many other ultra-rich Chinese made their fortunes listing their companies on the stock market.

    "The stock market over the past year has surged by over 100 percent in China. And the main driver of it is there's a lot of money overseas looking for good growth opportunities. Domestically speaking, it's been the same issue," he said.

    China's rapid modernization has spawned a building boom. New buildings are popping up in cities as fast as old ones can be torn down. The World Bank has estimated that between now and 2015, half of the world's construction will take place in China.

    Hoogewerf says all this new real estate has created a lot of instant wealth.

    "Last year lots of billionaires that were created - really was predominantly through property and retail. And both of those were led by urbanization. Because China's going through a massive urbanization phase," he said.

    Migrant workers from China's impoverished countryside are the muscle behind the growth, but they, like most of China's 1.3 billion people, reside at the opposite end of the economic scale from people like Yang Huiyan.

    As many as 200 million Chinese have left their rural homes to work in factories and construction sites on the country's southern and eastern coasts.

    Rights groups say the migrants are paid paltry wages or, sometimes, nothing at all.

    Paul Cavey, a China economist with Macquarie Securities, says the migrants suffer because of rapid political and economic changes that have benefited powerful businessmen rather than the working class.

    "What you have in China is authoritarianism but also extreme capitalism," he said. "If you look at a more market-driven economy in the West, there's a lot of protection for people who lose from the system. There's a lot of restraints on competition and monopolies. None of that exists in China. There's very little protection for workers."

    A decade ago, the Chinese government held all land and individuals could not obtain loans. Urban residents worked in state-owned companies and lived rent-free.

    In the late 1990s, the government privatized housing and began granting individual loans. It also privatized many state-owned enterprises, which accounted for most of China's production.

    Robin Munro is with the China Labor Bulletin, a workers' rights group in Hong Kong. He says managers of these enterprises took advantage of the reforms by deliberately bankrupting their companies, then obtaining bank loans to buy the companies at a low price.

    "The former managers emerge as big private entrepreneurs with massive private wealth in their hands. They would lay off most of the workforce and replace them with cheap labor from the countryside," said Munro.

    The migrants are easily exploited and denied social services because they are not legally registered in the cities. Many do not register because they lack required documents. Others fear losing their land back home, so they make frequent trips back instead of settling in a city.

    The state has cut agricultural taxes to help farmers, but Cavey says to narrow the wealth gap, land rights must be respected, and freedom of movement granted.

    "If you leave the countryside but you still own your land at home, you can rent the land out to other farmers so you have an income. And therefore you can monetize the land, so the minimum wage needed to attract you away from the countryside is that much higher," he said.

    The loss of farmland and homes to development projects has sparked thousands of protests in recent years. This unrest has been a significant factor in President Hu Jintao's call for creation of a so-called "harmonious society."

    President Hu and Premier Wen Jiabao have won praise for acknowledging that the inequality exists.

    In his speech to the 17th Chinese Communist Party Congress last week, Mr. Hu outlined plans to distribute economic growth benefits more evenly, in part by spending more on social programs.

    Cavey says the government knows what reforms are needed, but it does not know how to get the old Communist guard and the new capitalists to agree on them.

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Displaced By War, Syrian Artist Finds Inspiration Abroadi
    X
    May 02, 2016 1:36 PM
    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Displaced By War, Syrian Artist Finds Inspiration Abroad

    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Ethiopia’s Drought Takes Toll on Children

    Ethiopia is dealing with its worst drought in decades, thanks to El Nino weather patterns. An estimated 10 million people urgently need food aid. Six million of them are children, whose development may be compromised without sufficient help, Marthe van der Wolf reports for VOA from the Metahara district.
    Video

    Video Little Havana - a Slice of Cuban Culture in Florida

    Hispanic culture permeates everything in Miami’s Little Havana area: elderly men playing dominoes as they discuss politics, cigar rollers deep at work, or Cuban exiles talking with presidential candidates at a Cuban coffee window. With the recent rapprochement between Cuba and United States, one can only expect stronger ties between South Florida and Cuba.
    Video

    Video California Republicans Weigh Presidential Choices Amid Protests

    Republican presidential candidates have been wooing local party leaders in California, a state that could be decisive in selecting the party's nominee for U.S. president. VOA's Mike O’Sullivan reports delegates to the California party convention have been evaluating choices, while front-runner Donald Trump drew hundreds of raucous protesters Friday.
    Video

    Video Kurdish Football Team Helps War-Torn City Cope

    With the conflict still raging across much of Turkey’s predominantly Kurdish southeast, between the rebel PKK and the Turkish state, many Kurds are trying to escape the turmoil by focusing on the success of their football team Amedspor in Diyarbakir. The club is increasingly becoming a symbol for Kurds, not only in Diyarbakir but beyond. Dorian Jones reports from southeast Turkey.
    Video

    Video ‘The Lights of Africa’ - Through the Eyes of 54 Artists

    An exhibition bringing together the work of 54 African artists, one from each country, is touring the continent after debuting at COP21 in Paris. Called "Lumières d'Afrique," the show centers on access to electricity and, more figuratively, ideas that enlighten. Emilie Iob reports from Abidjan, the exhibition's first stop.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.

    Special Report

    Adrift The Invisible African Diaspora