China's gap between the urban rich and rural peasantry

[bhchao]

The New York Times has published a 5-page article on the huge gap between the urban rich and the rural poor in China, its economic effects on a rural Sichuan boy, and the factors leading to his death. This boy was so poor that he could not even afford to pay his $80 school tuition fee. His teacher demanded that he pay his $80 tuition or he will not be allowed to take the college entrance examination.

The article also mentions that the government enforces a two-class system in China, in which urban residents are given health benefits and are favored much more heavily than the rural poor, who are often refused residency rights in urban cities. This is of concern because the rural peasantry have served as the foundation of societal stability throughout China's history.

http://www.nytimes.com/2004/08/01/international/01CHIN.html?hp

[PollyWaffle]

the rural will not be included in any development model any time soon, unless they can produce coal & water from thin air...

might be fun to see what happens when they realize this

polly.

[Quest]

The problem is 不够分。 If the gap were smaller and if wealth were distriubted evenly throughout the country, many more boys would have become the Sichuan Boy. Also, people commit suicide for various reasons, can wealth save those boys who commit suicide in urban cities?

Borders between rich and poor areas should always be regulated, else the poor areas would be deserted over night, and the rich areas would collapse over night.

Though the problem is not to be denied, and there is no easy solution. What is better for the country? Spreading the wealth or letting part of the population get rich first? Articles like that only try to stir up the rural sentiments and provide no real solution to the problem.

[bhchao]

I am not biased towards the rural (nor is the New York Times article), because from an objective standpoint, the rapid urbanization of China's cities, the opportunities presented there, and the mass migration to the cities has helped millions of rural residents come out of poverty. But as the article mentioned, the rural are often discriminated against when they do try to find employment in the cities, for example, being deliberately refused residency rights.

The government perceives them as "lower-class" (which they are in economic terms) and this perception encourages a sort of caste system, like that in India. As a result, they are discriminated against and are often denied economic benefits in urban cities. The article mentioned that the ruling party in India lost an election because "the strong economic growth did not trickle down fast enough to the rural masses"

I agree with you that the article provides no real solution to the problem, but it highlights a reality in Chinese society that could become a real problem in the future. It looks like China now has the biggest gap between the rich and the poor, but I could be wrong on this. Also a quote from Wen Jiabao's top rural policy coordinator: "This government has recognized the problem of lopsided development," Chen Xiwen, the top rural policy coordinator for China's prime minister, Wen Jiabao, said in a recent interview. "Yet India does show that if this problem cannot be managed rationally, it could become a danger" for the Communist Party, he said."

Maybe the Communist government is a little bit more edgy

[Ole]

Hi Quest,

The problem is 不够分。

how do you translate this ?

thanks,

Ole

[Claw]

不 not

够 enough

分 divide

= there is not enough resources to distribute to everybody.

[Quest]

The government perceives them as "lower-class" (which they are in economic terms) and this perception encourages a sort of caste system, like that in India. As a result, they are discriminated against and are often denied economic benefits in urban cities.

I dont agree. That's a conspiracy interpretation. From the government's standpoint, I don't think they perceive or encourage any kind of caste system, or that they purposely try to keep a group of people down indefinitely. These articles try to play up that accusation, and 唯恐天下不乱。I believe the government does want to develop the inland areas, but it's just hard to attract investments into those places. While the infrastructures along coastal areas still lag behind the developed world, it would make more sense to put money into those places to at least have a part of China catch up first, also because investments put into these areas have a higher yielding. Then these areas would have the resources and experience to train talents around the country into technicians and professionals, and in turn, provide the capital to develop the inland infrastructure. If China had a west coast, the problem would have been solved easily. Rural China is not being kept down for the purpose of creating a caste system, it's just a 无可奈何 phase of the divide and conquer policy.

[Claw]

Quest: I think you misinterpreted what bhchao is saying. He's not saying that this is happening because of a conspiracy. He's saying that there exists a de facto caste system because of the rapid unequal growth. No one is purposely trying to keep a group of people down, but the current policies encourage officials to devote almost all resources towards urban growth, leaving rural citizens behind.

While this is great for economic expansion in the short-run, it will eventually come back to bite them because they will eventually have to deal with 3/4 of the population that are much poorer than their urban counterparts. The larger this disparity grows, they harder it will be for the government to deal with it; so the sooner they deal with it, the better.

[Claw]

Borders between rich and poor areas should always be regulated, else the poor areas would be deserted over night, and the rich areas would collapse over night.

But you have to question why there is such a huge disparity between rich and poor areas such that there is a need for regulation. If China were truly embracing capitalistic expansion, there shouldn't be a need for such regulations.

Yes, many poor people would end up migrating to the cities, where they would try to do some jobs more cheaply. However this does not mean that all poorer areas will become deserted. As people move out of rural communities, wages in these communties would increase because of the smaller labor force. Money would also flow back to the rural communities as urban migrants send their earned money back home. Altogether, average urban wages would decrease while average rural wages would increase -- this is how the free market system works. There will still be a disparity between urban and rural wages, but at least it will be at some sort of natural equilibrium.

As it stands now, the strict regulation of city borders creates a situation where urban wages are unnaturally high while rural wages are unnaturally low. China does this in the name of stability, but it only provides short-term stability. Eventually this disparity will create a very unstable situation as the government is left with most of their population unable to support themselves. Completely opening the borders would create a mass influx of migrants though, which as you stated would be bad for everyone, but the government should be taking steps to legally allow more migrants in so that this disparity does not continue unchecked. Once the situation improves, then the borders could be completely lifted.

One of the most major problems I see though, is the lack of free public education, which is what this article touches upon. China is letting the minds of some very talented youth go to waste simply because they cannot afford to attend school -- this leads to a very inefficient system. If someone is smart and determined enough, they should be able to find a good job. But because they cannot attend a good school, they will never get this opportunity. Businesses that are looking for talented people will also end up with a smaller qualified-applicant pool. This ends up being very inefficient for the whole country -- businesses waste money on fewer qualified people, and people would could have been extremely qualified end up working in the fields because they cannot afford to go anywhere else. It is no wonder why many people in the U.S. call education "the great equalizer."

[Quest]

Money would also flow back to the rural communities as urban migrants send their earned money back home. Altogether, average urban wages would decrease while average rural wages would increase -- this is how the free market system works.

I agree 100%, but there is not enough to flow back. The government's budget is limited, and the urban resources are limited. it's easier to break down a wall to move it forward brick by brick than to move the whole wall all together. It is also incorrect to say that the rural people cannot move to cities to find jobs. In fact the opposite is happening right now. I speak of my experience in Guangzhou, you see out of province peasants and laborers everywhere doing all sorts of things... The so called free market system is not a wonder pill, as with all systems, it should be applied with caution according to actual situations.

[ala]

One of the most major problems I see though, is the lack of free public education, which is what this article touches upon.

This doesn't occur because there's no money in the rural areas. The return is too minimal compared to the investment. A rural child who goes to college will likely move into the cities for good. What China needs is the creation of more indigenous urban centers, but there's little incentive for them as major existing urban centers are still developing and very cheap. In other words, the policy of first giving wealth to the urban areas is very correct. Once cities like Shanghai, Guangzhou become very wealthy, there will be more investment incentive to build cheaper urban centers in the rural areas.

Altogether, average urban wages would decrease while average rural wages would increase -- this is how the free market system works. There will still be a disparity between urban and rural wages, but at least it will be at some sort of natural equilibrium.

First, urban wages are not very high as it is, THEY CANNOT AFFORD A FURTHER DECREASE. From a Shanghai perspective, 13 million are registered residents, 7 million are migrant and/or unregistered. Urban infrastructure in Shanghai is already MAXED out, quality of public education in Shanghai has deteriorated rapidly with growing numbers of migrant children enrolled. If existing restrictions are removed, Shanghai will become ovewhelmed with millions of low-skill workers in a city where there are already plenty of low-skill workers. This is not what a developing city needs. Should the city be obligated to provide health insurance, public schooling to these migrant populations? If so, where does the money come from? Certainly not from the migrants. Disposable income in Shanghai is only 1/5 of actual GDP per capita; the legal residents are already being taxed to death. In a real free-market system, there will be no public health care, housing, nor education.

The de facto caste system will remain until the cost of operating in existing major cities become too high for their products, and greater profit can be made by investing in the rural inner areas. This means, some people are going to get rich before others.

[39degN]

If existing restrictions are removed, Shanghai will become ovewhelmed with millions of low-skill workers in a city where there are already plenty of low-skill workers.

if there are lots of lower skill workers in a city, it will certainly cause lower skill work's wage decrease, and the wage's decrease will simply cause the workers cant afford a living in the big city, they'll finally back to their hometown, on the other hand, if the workers improved their skill in the process, they'll no longer work as a lower skill worker, and became a higher skill one, meanwhile if any urban citizen has no any skill, he cant afford living either, so I m afraid urban life is not suitable for him, because he has no qualification. we called this natural selection, it's the real spirit of free market economy. Treating people in different ways only because their born places are different is really a funny policy for a country.

This is not what a developing city needs.

Yeah, so unfair play is a real developing city needs. Because of its developing based on unfair play in the first place.

Should the city be obligated to provide health insurance, public schooling to these migrant populations? If so, where does the money come from? Certainly not from the migrants. Disposable income in Shanghai is only 1/5 of actual GDP per capita; the legal residents are already being taxed to death.

If migrant contribute to GDP as same as you did or even much more than you, why they shouldn't have the right? You mean the cost of providing insurance is charged by the city? No, it's by migrants themselves.

In a real free-market system, there will be no public health care, housing, nor education.

Then what's the use of tax (obviously some of it achieved by migrants)?

The de facto caste system will remain until the cost of operating in existing major cities become too high for their products, and greater profit can be made by investing in the rural inner areas. This means, some people are going to get rich before others.

So if the cost of operating in existing major cities couldn't become too high, we have to continue this unfair play, it's a living proof of "life is unfair, use to it".

[Ian_Lee]

Actually even a college degree in the urban center cannot guarantee that kid a job.

I read that 1 out of 2 university graduates in China is unemployed. (Is that true?) And the wages for those graduates returning from overseas universities have been lowering year after year even in this red hot economy.

[Quest]

the wage's decrease will simply cause the workers cant afford a living in the big city, they'll finally back to their hometown

no, they do all kinds of things legally or illegally! and only go back when they get the money their families back home expect them to get.

Treating people in different ways only because their born places are different is really a funny policy for a country.

Have you seen the Titanics? Everyone wanted to get on the life boats, but there weren't enough for everyone. If you were the captain, how would you distribute the boats, so that it would be fair to everyone? Sure put everyone on the boats, you might say! but then the boats would no longer float... In the end women and children were given precedence. Was it fair to the men? no. Could it be helped? no.

meanwhile if any urban citizen has no any skill, he cant afford living either, so I m afraid urban life is not suitable for him, because he has no qualification.

So are you suggesting that he should move to the rural areas? Is it fair to him that someone moved in and kicked him out?

[Quest]

Yeah, so unfair play is a real developing city needs. Because of its developing based on unfair play in the first place.

I am sure cities should have their right to take care of their own citizens first.

[Claw]

Have you seen the Titanics? Everyone wanted to get on the life boats, but there weren't enough for everyone. If you were the captain, how would you distribute the boats, so that it would be fair to everyone? Sure put everyone on the boats, you might say! but then the boats would no longer float... In the end women and children were given precedence. Was it fair to the men? no. Could it be helped? no.

It's funny you should mention Titanic because it actually shows the opposite. If you watch that movie more closely, it was the first class passengers that got precedence. The lower class passengers, including many women and children, were left to die. Remember the scene when they locked the gates to the lower class cabins and the people below were trying to ram their way out? Quote taken from IMDB:

Ruth: Will the lifeboats be seated according to class? I hope they aren't too crowded.

Rose: Oh mother, shut up! Don't you understand? The water is freezing and there aren't enough boats. Not enough by half. Half the people on this ship are going to die.

Cal Hockley: Not the better half.

It was because of this tragedy that all ship makers were forced to install enough lifeboats for all passengers. Is China going to wait for its own tragedy before it installs more lifeboats?

[Quest]

it is installing more lifeboats, but it does not have enough money to make them. So in order to get that money in the least time, the available boats are given to those that have the highest potential to bring back the money.

[Quest]

I see complaints but no solutions. Some live or all die? let's remove the regulations....... let everyone in, lets all die together. I am poor, why can't I share Bill Gates' wealth? Why is my neighbor richer than me? Why did I not win the lottery? too bad... I still have to think of a way to make a living.

Also, can rural residents go to the cities to find employment? Yes they can! Who says they cannot? All you need is a train ticket, anyone in China can come to Guangzhou to find work. They only arrest bums that wander in the streets. So is that fair to Guangzhou citizens that their jobs are being taken away? no!

[Ian_Lee]

Does the Central government in Beijing have the resources to address the urban-rural wealth/income gap?

Of course, they do. Some of the money-saving measures I can conceive of:

Buy less fancy Sukhoi warplanes from Russia (Of course many posters would oppose). Call a halt to the extravagant Space Program (Of course many posters would oppose too).

Since the rural poor are the least privileged and least vocal, of course they are least endowed.

But if a Socialist government abandons the main constituents which their revolutionary ideals based on, then why was there the need of a revolution in the first place?

[Ian_Lee]

Actually why don't Beijing let millions rural poor march west and own-n-till their lots in Qinghai, Xinjiang and Tibet?

If land ownership of a relatively large sect in the West is an incentive, they may not flood to the city in the East.