China’s top 1% owns 1/3 of national wealth, says report

According to the China Family Panel Studies published by Beijing University in 2015, China’s income and wealth inequality has been widening, the top 1% of Chinese families own 1/3 of national wealth, while the bottom 25% own merely 1% of total wealth. The study conducted research on 14960 families in 160 counties and cities from 25 provinces in China, the findings suggest that income and wealth inequality has been exacerbating in Chinese society.

In the past 3 years, the Gini coefficient of Chinese families has risen from 0.3 in the 1980s to 0.45. According to CFP’s estimate in 2012, China’s income Gini coefficient reached 0.49, which gar exceeded the 0.4 warning limit. The report’s result on wealth inequality was more striking; China’s wealth Gini coefficient went from 0.45 in 1995 to o.73 in 2012. The results meant that the top 1% of Chinese families own around 1/3 of national wealth while the bottom 25% own just 1% of collective wealth.

Apart from income and wealth inequality, there are severe discrepancies in Chinese people’s educational opportunity, healthcare and other social welfare. Take education for instance, the long-held belief that hard work guarantees a college offer is losing its credibility. Educational resources and opportunities vary greatly based on an individual’s place of birth (city or countryside, provinces) and gender. The discrepancy between city and countryside is particularly significant. According to China Family Panel Studies 2015, inequality in terms of people’s education resource and opportunity was the lowest for those born in the 1960s, since then inequality has risen persistently. Factors that are out of a person’s control such as his Hukou (birth registration), parents’ education level, association with the Party and place of birth all affect his chance of receiving educational resources. It is clear that public policy should reduce the negative impact of people’s social circumstances on their potential development and give every citizen in Chinese society a fair chance to receive adequate education.

With regard to healthcare, China’s social insurance system was designed to reduce the impact of income inequality, but it adjusted on contrary. Professor Jianxin Li from Beijing University, main author of the China Family Panel Studies 2015, argues that people who have worse health condition are more likely to lack basic healthcare resources and have greater financial pressure to pay for medical care. In terms of individual income, people with high income receive more health subsidy, and China’s health subsidies have been given disproportionately to the wealthy instead of the poor.

In terms of gender, women in general have lower educational level and job income; their health conditions also tend to be worse than men. Chinese women are more likely to have depression and chronic disease. However, in terms of individual’s opportunity to receive healthcare, the ration of women having health insurance is notably lower than that of men, and the proportion of women bearing financial cost for healthcare is higher than that of men.

Moreover, health inequality also exists between city residents and countryside residents. People in the countryside have higher ratio of suffering from depression and other chronic diseases such as blood hypertension, respiratory disease and gastroenteritis, the latter two are mainly caused by the lack of decent living condition and healthcare service. Although there the new health insurance coverage is higher in the countryside than in the cities, its potency is much lower, therefore countryside residents have a higher chance of paying for their healthcare than city residents.

Professor Lee states in the report that these forms of inequalities are exacerbating in all respects and these issues need to be addressed in order to prevent social instability and obstacles to social development in the future.