Essay on Poverty and Income Inequality in China

1348 Words Nov 4th, 2008 6 Pages
Another Inquiry on the Economic Welfare and Poverty in China
The trade-off between economic growth and redistribution has become one of the major notes concerning the emerging economies of post-Cold War world. Adding to this struggle the urge to integrate into the international system while keeping the balances right at home has been another macro-level concern. In conjunction such liabilities not only necessitates the examination of fiscal and structural reforms but also the international trends as well within an historical framing. For that matter the case of China is fascinating in terms of blending these elements of economic and political changes in the last 30 years. However this attempt is not without a cost. This paper aims to
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The decreasing role of the state in economic activities seems to be the major cause of this unbalanced trend. These changes cover a decrease in state-owned enterprises, the increasing number of laid-off workers and the structural deficiency of the government to provide anti-poverty programs . On the international scale Fulong Wu & Ningying Huang argue that the industrial shift from labor-intensive to very competitive capital and technology-intensive sectors was another reason for China to fail achieving the balance between growth and redistribution . The consequences of these changes are the increasing rates of unemployment in the late 1990s and the inability of the working class to rapidly adapt to the demands of the employment market.
The rapid economic growth was perceived as an airbag against the threat of urban poverty. However the gradual alienation of a particular segment of the unemployed alarmed the officials about the irreversibility and respective social tension in the society. Fulong Wu & Ningying Huang defines those as the “outsiders” of the Chinese society who are living in the poverty line of $1 (PPP) as determined by the World Bank. Those outsiders have no hope of returning to the labor market. For that matter there is defined a new urban poverty in China that could even impede the economic growth if remained neglected. In such circumstances without
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