Page 14 - 2015_WhitePaper_web
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5 White Paper on the Business Environment in China
a government worker who would have not been mak- With rich households saving more of their income than poor,
that income inequality helps explain China’s high savings rate
ing more than $15,000 a year could a ord so many and low consumption.”3
expensive watches on his public salary. In a nation A more recent study by a professor at Southwestern Uni-
versity of Finance and Economics and Texas A&M University
struggling with rampant local corruption, Yang soon shows that “the gap between China’s haves and have nots is ex-
tremely wide, perhaps the widest of any country in the world
acquired another nickname: “watch brother.”9 [and that] China’s top 20 percent command 68.4 percent of
income, and the bottom 20 percent just 0.5percent.”13
By September 21, “Watch Brother” had been “relieved of
his position and accused of serious discipline violations.”9 “ e Gini coe cient is a widely used measure of income
inequality,” writes e Wall Street Journal’s China Real Time
Less than a month later, the “[former] deputy chief of blog. “A score of 1 means perfect inequality, with one person
[Guangzhou suburb] Panyu district’s public security bureau controlling all a country’s income, a score of 0 means perfect
and head of the district’s urban management bureau”, a civic equality. [Recent independent results] put China’s Gini
o cial drawing a salary of roughly $1,600 per month, was coe cient at 0.61. at’s signi cantly higher than an estimate
found to own 22 properties throughout Guangzhou valued of 0.44 by a Chinese NGO based on the o cial household
at over $6.3 million.10 e o cial, named Cai Bin but nick- income data.”13
named “Uncle House”, reportedly told his superiors that he
owned only two.11 Corruption among China’s top earners will feature in any
explanation for the growing wealth gap: “Government control
e ouster of Bo Xilai based on a laundry-list of disci- of major investment projects, and key resources like land, of-
plinary violations, however, was certainly the highest-pro le fers multiple opportunities for graft.”3
incident of the year.
Moreover, in the face of vague o cial data one professor
Mr. Bo, formerly the party secretary of the state-level at a prestigious Mainland university estimates “180,000 mass
Chongqing Municipality and once a front-runner for a seat incidents in 2010”, compared to 50,000 in 2002. Corruption
on the prestigious Standing Committee of the CPC, was “in- is considered one of the most widespread causes of protests,
vestigated within the party for alleged crimes including abuse along with land grabs and environmental degradation.3
of power, bribe-taking and involvement in his wife’s murder
of the British businessman Neil Heywood,” before being Rule of law, the oft-cited catchall category for systemic im-
“ejected from the Communist Party and China’s parliament” provements in favor of which foreign stakeholders like Am-
and thus losing his former immunity from prosecution.12 Cham South China member companies have been tirelessly
arguing for more than a decade, still proves elusive and is an
e Australian reported in December 2012 that in addi- excellent example of the central proto-issue that manifests it-
tion to the host of charges Mr. Bo already faces, “Chinese self in arguments for reform, arguments against corruption,
prosecutors building a corruption case against Bo Xilai are arguments against SOEs’ privileges and more.
believed to be investigating whether the fallen politician laun-
dered an illicit fortune through Macau.”12 at issue is simple: doing the right thing for the coun-
try—the thing that nearly everyone seems to agree is neces-
“Public demand for a transparent asset declaration sys- sary—requires the Party’s loosening its grip on governance in
tem for government and party o cials has grown strong in favor of a system de ned by the rule of law .
recent years. For a party that calls itself ‘communist,’” argues
commentator Yiyi Lu, “Refusal to publish information about Notably, it seems that whenever an editor needs a polemic
the assets of o ce holders is clearly indefensible, especially against the crass capitalism of the West they roll out the same
when such disclosures are already the norm in many other tired, ridiculous universal-su rage-demanding straw man:
countries.”2
When it comes to political systems, Western opinion
“ e party’s many failures in the past to reign in corrup-
tion among its ranks—bar a few high-pro le scapegoats—has leaders are still stuck in a narrative of dichotomy: de-
led to “Tsinghua University professor Sun Liping arguing that
there are few options left to stem the spread and intensi ca- mocracy versus authoritarianism. But the competition
tion of corruption other than forcing o cials to disclose their
assets.”2 in the 21st century, as scholar Zhang Weiwei says, is
Ill-gotten wealth is an increasingly problematic issue for between good and bad governance. China has devel-
the Party as income inequality continues to grow.
oped the right formula for choosing political leaders
An academic survey conducted in 2008 found that “ e
top 10 percent of China’s urban dwellers had average dispos- that is consistent with its culture and history and suit-
able income of 139,000 yuan a year, 7 times more than aver-
age earners, and 25 times more than the bottom 10 percent. able to modern circumstances. It should be improved
14 on the basis of this formula, not Western-style democ-
racy. 14
a government worker who would have not been mak- With rich households saving more of their income than poor,
that income inequality helps explain China’s high savings rate
ing more than $15,000 a year could a ord so many and low consumption.”3
expensive watches on his public salary. In a nation A more recent study by a professor at Southwestern Uni-
versity of Finance and Economics and Texas A&M University
struggling with rampant local corruption, Yang soon shows that “the gap between China’s haves and have nots is ex-
tremely wide, perhaps the widest of any country in the world
acquired another nickname: “watch brother.”9 [and that] China’s top 20 percent command 68.4 percent of
income, and the bottom 20 percent just 0.5percent.”13
By September 21, “Watch Brother” had been “relieved of
his position and accused of serious discipline violations.”9 “ e Gini coe cient is a widely used measure of income
inequality,” writes e Wall Street Journal’s China Real Time
Less than a month later, the “[former] deputy chief of blog. “A score of 1 means perfect inequality, with one person
[Guangzhou suburb] Panyu district’s public security bureau controlling all a country’s income, a score of 0 means perfect
and head of the district’s urban management bureau”, a civic equality. [Recent independent results] put China’s Gini
o cial drawing a salary of roughly $1,600 per month, was coe cient at 0.61. at’s signi cantly higher than an estimate
found to own 22 properties throughout Guangzhou valued of 0.44 by a Chinese NGO based on the o cial household
at over $6.3 million.10 e o cial, named Cai Bin but nick- income data.”13
named “Uncle House”, reportedly told his superiors that he
owned only two.11 Corruption among China’s top earners will feature in any
explanation for the growing wealth gap: “Government control
e ouster of Bo Xilai based on a laundry-list of disci- of major investment projects, and key resources like land, of-
plinary violations, however, was certainly the highest-pro le fers multiple opportunities for graft.”3
incident of the year.
Moreover, in the face of vague o cial data one professor
Mr. Bo, formerly the party secretary of the state-level at a prestigious Mainland university estimates “180,000 mass
Chongqing Municipality and once a front-runner for a seat incidents in 2010”, compared to 50,000 in 2002. Corruption
on the prestigious Standing Committee of the CPC, was “in- is considered one of the most widespread causes of protests,
vestigated within the party for alleged crimes including abuse along with land grabs and environmental degradation.3
of power, bribe-taking and involvement in his wife’s murder
of the British businessman Neil Heywood,” before being Rule of law, the oft-cited catchall category for systemic im-
“ejected from the Communist Party and China’s parliament” provements in favor of which foreign stakeholders like Am-
and thus losing his former immunity from prosecution.12 Cham South China member companies have been tirelessly
arguing for more than a decade, still proves elusive and is an
e Australian reported in December 2012 that in addi- excellent example of the central proto-issue that manifests it-
tion to the host of charges Mr. Bo already faces, “Chinese self in arguments for reform, arguments against corruption,
prosecutors building a corruption case against Bo Xilai are arguments against SOEs’ privileges and more.
believed to be investigating whether the fallen politician laun-
dered an illicit fortune through Macau.”12 at issue is simple: doing the right thing for the coun-
try—the thing that nearly everyone seems to agree is neces-
“Public demand for a transparent asset declaration sys- sary—requires the Party’s loosening its grip on governance in
tem for government and party o cials has grown strong in favor of a system de ned by the rule of law .
recent years. For a party that calls itself ‘communist,’” argues
commentator Yiyi Lu, “Refusal to publish information about Notably, it seems that whenever an editor needs a polemic
the assets of o ce holders is clearly indefensible, especially against the crass capitalism of the West they roll out the same
when such disclosures are already the norm in many other tired, ridiculous universal-su rage-demanding straw man:
countries.”2
When it comes to political systems, Western opinion
“ e party’s many failures in the past to reign in corrup-
tion among its ranks—bar a few high-pro le scapegoats—has leaders are still stuck in a narrative of dichotomy: de-
led to “Tsinghua University professor Sun Liping arguing that
there are few options left to stem the spread and intensi ca- mocracy versus authoritarianism. But the competition
tion of corruption other than forcing o cials to disclose their
assets.”2 in the 21st century, as scholar Zhang Weiwei says, is
Ill-gotten wealth is an increasingly problematic issue for between good and bad governance. China has devel-
the Party as income inequality continues to grow.
oped the right formula for choosing political leaders
An academic survey conducted in 2008 found that “ e
top 10 percent of China’s urban dwellers had average dispos- that is consistent with its culture and history and suit-
able income of 139,000 yuan a year, 7 times more than aver-
age earners, and 25 times more than the bottom 10 percent. able to modern circumstances. It should be improved
14 on the basis of this formula, not Western-style democ-
racy. 14
