Geographic Inequality in China (Essay Sample)

Abstract
For someone to have a clear picture of how poverty and inequality circulate in the world’s most powerful and popular countries, they must have a clear image of the situation globally first. China’s future growth is the central achievement of the states government at a global level. Looking at how the country is venturing into the global business then a review of China’s poverty and inequality is required to a wider debate on its globalization outcomes.
In this research, the effect of China’s economy on both poverty and inequality will be discussed. China being one of the most influential and progressive country in the world has been facing cases of poverty and inequality among the different classes of people. Due to the wide growth in the country’s economy many people practically came up with the assumption that this would end up making the people in china more happy and rich than they used to and also have a stable economy which can sustain itself without asking for help from other countries or the World Bank. Due to the rapid growth in economy it is expected that many people ended up getting rich and with this the middle class emerged since they can not all fit on the super-rich class, however by this the advantages they get will eventually have to depreciate due to high competition on who will fill the middle class. However, since not all people get a chance to be billionaires or even be able to make it to the middle class than a creation of desperation between the poor and rich emerged.
In over the last three decades, China has been affected by fast growth in both populations and economically. This rapid growth has played a major part in nurturing people to becoming wealthy, and it also minimized the number of people who are affected by poverty from 70% to 14% in 2004. On the other hand, this drastic change of events also created different kinds of desperations between the people. First, the income rate of people increased and this shifted the income inequality between rural and urban income gap and also affected the income of the people living on the middle class in urban areas and those living professionally in urban areas. Due to the rapid rise of economy there has been an increase in inequality other public sectors such as in schools and hospitals (David Dollar, 2007). Due to this the restriction of rural to urban migration has been seen to drop since in the urban there are few opportunities for the less qualified people from rural areas. Since many rich and middle class people all live in urban locations, the cost of living and property value in rural areas has drastically reduced and it has made it hard for anyone to sell land in rural areas of china.
According to (David Dollar, 2007), China has come up with a decentralized system that looks up to the local government for funds that are related to basic health and education. This was influenced by the fact that the poor could not be able to afford most of the basic need required and also they could not be able to afford the high cost of basic private needs and therefore the government had to come in and set a permanent solution to this problems. The funny thing about the widely grown economy in china is that it has increased to such an extent that it turned into being a problem for the government. This is because the use of machines has been growing rapidly in china and therefore made many people lose their jobs and by this the companies end up not having jobs for people rather than machines. In this case, the governments have no power to increase when it comes to increasing the amount of cash they invest on improving services and addressing racial or ethnic differences. Therefore the government had to come with a way to encourage movement, funding health for the poor, and supporting education for the needy and also shift the economy away from exports and investments and focus it to domestic consumption and services offered to the public therefore taking care of social disparities.
Economic reform and poverty reduction
China has so far maintained its growth rate for over three decades now since the beginning of its economic change in the late 1970’s, in which this economic growth has triggered a high increase in average living standards. In this case it is important to begin with a brief review on how china started and how it affected its growth. Just like all other Asian countries China faced a growth transition, but compared to all other Asian countries Chinas growth is evident, and it stands out beyond all others. For instance from the years 1989-2004 the averaged capita per growth was about 8.9%, for India 4% and all other developing Asian countries apart from China 3%. The main question which people ask themselves is why has china suddenly emerged on top of all other Asian countries in terms of growth? This is a hard question since China stands out from the rest of the country’s surrounding it and its influence in growth have been affected by many factors. However, I will highlight some of the major factors that lead to the drastic growth of china. First, as compared to it neighboring countries china a strong and established free trade which created growth opportunity for china. Second, china always had a strong base of human capital as compared to the neighboring countries. Third, as compared to the neighboring countries and all other Asian countries China had a free investment opportunity which lead to many people venturing into business.
The size of the country geographically also influenced this rapid growth, since neighboring countries like Thailand also had open investment opportunities but since the country is small most people ended up fighting for resources and this radically minimized the growth rate in the country. By the late 1860’s about 25% of the adults in china were literate and this played a big role in the growth since most people had the picture of what they should make their lives be in future. On the other hand, in south Asia in the late 1860’s the literacy level of the adults was 5% of the population which was about the same as in Africa. On the other end of the world, the Latin Americans had a literacy level of about 17% in the late 1860’s. The funny part is that by the year 1990, china was more or less the poorest among the countries surrounding it and to make the matter worse it was poorer than India, however, the number of educated and literate people was higher than of those other countries surrounding it (Lee, 2000).
Many people say that the rapid growth of China has been an influence by private wealth, whereby many rich people tend to open their organizations and firms and through this investment the economy gets the boost it needs. According to the Global capital report GWR, in 2010 the property values that were accounted for were mostly invested on real assets per adult around china and this was the most used way of wealth creation in china however, they never came for free and everyone had a price to pay, more so those people who had to finance this projects with their savings money.
The above chart is used to imply that even though the wealth per citizen in China was about $17,000 which is practically double that of other Asian growing countries, the median wealth was as low as $6,000. However, the table shows that there has been an equal distribution of wealth.
Economic reform and increased inequality
The economic growth in China is so rapid to such an extent that all household has had a change to benefit from the growth, and therefore slowly eradicating poverty in the country. However, this does not mean that all people have benefited in the same way, others have benefited to greater extents than others. This benefits are evident through inequality by different household incomes and consumptions of goods and also in inequalities in basic social attainments such as education status and health status. The rise of inequality is an obvious outcome of market resources that have triggered a rapid growth. In other situations, the growth is triggered purposely in such a way that the government regulates frequency to a higher inequality other than making them more severe. However, increased inequality can be changed or even stopped by the change of some of this government policies.
According to (Lewis, 1954), he wrote that "for a country to develop, there must be inegalitarian since it does not begin at every part of the economy very time it does”. When compared to the vision Lewis had in mind, China has two methods that support his views on development. First, is the process of rural to urban migration and the eagerness of people going to return to schools to further their education, so that they can be able to fit to a higher social classes, therefore creating a good future for themselves. I 1890’s china being undeveloped it started with just a few highly educated individuals for its reforms, thereby using a small population of both people living in urban and rural areas, despite the differences in labor production in the two locations. However in the later China this changed and people started getting reforms and salaries according to their education status, unlike the older time where all jobs had the same amount of pay despite the education background of an individual.
China introduced a system that they used to call the Hukou restriction on rural to urban migration. This system was used to separate people according to their education status and the amount of wealth one had. It restricted people from migrating from rural areas to urban areas, but the system has slowly been dying in the last three decade. This meant that people had to have registrations "Hukou" whether in rural or urban areas, and they could not be allowed to change their regi...