Tuesday, July 12, 2005

China's Political Economy

Rural Poor Aren't Sharing In Spoils of China's Changes: "A recent study conducted by the World Bank found that incomes among rural Chinese -- about three-fourths of the total population -- have declined slightly in the years since China entered the WTO, while urban residents have enjoyed modest gains...

...Last month, China's government announced that the income gap had widened in the first three months of the year, with the richest 10 percent of the population controlling 45 percent of the country's wealth and the poorest 10th holding little more than 1 percent, according to the official New China News Agency.

In Beijing, concern mounts that the rural poor are falling so far behind as to challenge the legitimacy of the party. Demonstrations have become near-daily occurrences as farmers protest loss of land to development and excessive taxation. In response, the central government has rolled back taxes on peasants.

...Throughout China, more than 200 million farmers have supplemented incomes by heading to coastal provinces to do construction or factory work. Typically, one or two people go, sending money back to relatives who remain at home to tend land.

All of Wang's hopes rest on his youngest son, now in Jingyuan in high school. He is the first in his family to attain that level of education. The costs of keeping him in school are monumental, about $250 per year.

Every year, Wang borrows that amount from the local credit cooperative, and every year he cobbles together about $100 from friends to keep up with the interest payments so he can draw another loan.

His total debt exceeds $1,250 -- about what the average person lives on here in a decade. Still, his may be a rational strategy for the times: He hopes his son will test into a university, get a white-collar job in a city, and lift his family out of the poverty that still defines reality in most of rural China."

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