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Post China and Income Distribution
Created by John Eipper on 08/07/12 5:50 AM

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China and Income Distribution (Tor Guimaraes, USA, 08/07/12 5:50 am)

Regarding Istvan Simon's post of 5 August, it is rather surprising to me that anyone who claims to have considerable understanding about what is going on in China would say, "I am unaware of any faction of the Communist Party that defends greater distribution of income in China. If Tor is right, let him please name the names of the Chinese leaders that defend such a position. I claim that they do not exist."

Simple logic alone clearly supports my position. Everyone by now knows that in China for the last several years within and outside the Central Committee there has been a raging debate over policies addressing the need for more/less income distribution. If not, all one has to do is Google it to get a plethora of good sources describing this debate in considerable detail. Normally, any time there is a strong debate on any topic, there are at least two factions, and the debate about the need for increased income distribution within the Chinese Central Committee is no exception.

I believe it is very nice that Istvan is "married to Chunhui, who was born in China, and who follows the Chinese political developments very closely." I too have numerous friends and colleagues in China since my first work there in the year prior to the Tiananmen massacre. Most of my "students" at Fudan University at the time were university professors and administrators. Some of them have become relatively very well placed, but I will not provide any names. Unfortunately, there is great disagreement even among them (including Communist Party leaders/members) about the need for more income distribution. However, this should come as no surprise, since the debate has been raging throughout the nation (in all nine "sub nations" of China).

Am I to assume that Istvan thinks there is no debate within the Communist Party about the need for income distribution? Of course there is. To name some names, how about Premier Wen Jiabao stating in his government work report delivered to the annual parliamentary session in Beijing: "Readjusting income distribution in China in a reasonable manner is a long-term task and an urgent issue to address at present." For 2011, he also said the government should implement measures to: increase basic income of low-income people, further adjust income distribution, and "vigorously" overhaul and standardize income distribution. Despite contrary arguments, these objectives have not changed and some progress has been made, though given the widespread controversy, not enough. If he can win this "debate" against the more "capitalistic" faction of the government (including local bureaucracies/capitalists) or just the realities of the marketplace which thus far have promoted a widening income gap, China will quickly become the most powerful nation on Earth.

JE comments:  The Chinese authorities seem to be walking a tightrope between giving too much economic opportunity to their citizenry, which may endanger the regime, and not providing enough, which will also endanger the regime.  China experts Siegfried Ramler, William Ratliff, and Charles Ridley, among others in WAISdom, have often wrote on the Chinese ideal of order and stability.  China in the last twenty years has changed so markedly, in economic if not political terms, that there must be cause for great concern from within the government.

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