Widening Gap between the Rich and the Poor in China - Case Study Example

Widening Gap between the Rich and the Poor in China Name Institutions Widening Gap between the Rich and the Poor in China Geographical Factors The economy of China is not a small matter. With the world becoming increasingly globalized, the economic position of the country is increasingly becoming interconnected with other region across the world. On the other hand, the breach amid the rich and poor is widening especially in the country’s rural-urban boundaries. Although the cities are developing rapidly and becoming more modernized, the people living within the rural are not being affected by such changes and subsequently fail to benefit from growing economy in China. From estimation by the OECD, the estimated average income with the cities is $100/year and the average income in the rural areas is $300/year. With the increasing gap between the rich and the poor, the urban and rural, there has been massive immigration from the rural areas to the cities. Considering the geographical location of China, the western part of the country tends to be agricultural occupied and rural, and the eastern part is much more technology and business driven (Ketover, 2009). As a result, the urban-divide tends to separate China physically into two major regions. Not only are the incomes levels lower in the rural areas, but these areas tend to have inferior technology as well. With the rising level of competition in businesses and need for efficiency and reliability in all aspects of life, technological integration plays important role in the achievement of the desired results. Therefore, differences in economic activities within the eastern and western regions play important role in determining the levels of disparities. In China, agricultural science and technology improved to higher levels with some of the country’s projects ranking among the best globally while other aimed at cutting the edge of the global agro-technology. However, there is only translation of 30% of the fruitful agricultural research into practical use in comparisons with 70-80% in the developed countries. Income Inequalities The major reasons for the slow take up and development are increased level of bureaucracy, corruption, insufficient funds, and staffing for dissemination with an aim of improving the prevailing status quo. Moreover, due to inadequate skills and experience, the country experience poor quality of the workforce. The high illiteracy level among the marginalized population in China approximately 35% representing 30% points above the United States and Japan is another obstacle deterring the development of rural commodity economy. Currently, more than half of the country’s workers live within the urban areas, as the rural migrants tend to move to the cities to look for better employment options. According to the NBS, 252 million migrant employees live in cities. However, these migrants are not entitled to healthcare, pensions, and free education for their children under the existing China’s household registration that divides the citizens based on their areas of residence and ensure appropriate allocation of public services (Talley, 2016). Most researches cite that the major reason behind the inequality in China is the existing divide between rural and urban Chinese. The Chinese authority made a pledge of reducing the existing gap between the rich and the poor in a bid to address corruption. Moreover, China has high level of inequality mainly due to very little transfer. The government used resources in building investment infrastructure. Most economists cite that it was time that the Chinese government changed its spending priority to income transfer, and social welfare programmes to guarantee the achievement of desired income balances. The income inequality of China began increasing when Deng Xiaoping launched market-oriented reforms that opened the economy in 1978 with aim of permitting some people and other regions to become successful first and for the reason of achieving the desired common prosperity faster (Talley, 2016). The incomes of the poor are growing; however, it appears that the rich Chinese are getting richer much faster. With reference to the World Bank, between 2002 and 2007, the country’s income ratio of the richest was 10% while the poorest 10% which both increased from 19:1 and 25:1. The major factors driving such phenomenon include development policies, which majorly favour heavy industries, cities, and economic zones considered special especially the coastal areas. The research by the World Bank, in 2009, revealed that the urban residents earned 2.33 greater than those in the rural areas did. Consequently, the income of rural residents within the coastal areas tripled from 1989 to 2004. Globalization With the rising level of population in China, the country continues to experience increasing ad persistence of the informal sectors. As one of the emerging countries, the country continues to attract several global economic activities that besides creating the opportunity for locals, also contributes to the increasing gap between the rich and the poor. Globalization has been able to narrow poverty between the rich and the poor in most countries. For example, the GDP per capita of China increased much faster, and hundreds of people have been raised from poverty since the country undertook economic reforms, and the country entered the global economy such as World Trade Organization (WTO) membership, which allowed China to grow economically and improve the average income of the Chinese. Although globalization benefited the poor, trade liberalization and the opening of the economies led to an increment in the gini coefficient with the entrepreneurs doing better than the employees do (Hammond & Stapleton, 2008). Consequently, the country has nouveau rich people undertaking the businesses; however, most of their workers receive fewer shares of the economic benefits. Due to the increment of the minimum wage by the government, salaries of the people have been able to increase. Considering the increasing competition level in the global markets, most investors in China’s market are seeking for experienced and skilled employees with the ability to ensure the achievement of the desired objectives. Nonetheless, China has a limited number of such workers, which allow employment of foreigners. Accordingly, the gap between the poor and affluent continue to escalate. Due to an inadequate number of skilled workers and opening up the trade, the country’s GDP grew. To some extent, the country experienced more corruption in comparison to other economies that never opened up so much hence succumbing to less corruption (Xu & Li, 2014). Currently, there is growing level of inequality in China between the local entrepreneurial classes, state workers, and growing level of corruption (Wu, 2014). On the other hand, the country’s average worker has had high level of stagnation of the actual average earning due to globalization. Therefore, globalization has not been so effective and good for both the working and middle class of the developing countries. Due to higher trade from China, the prices of goods and services have increased slowly which makes inflation down in the developed countries thanks to the imports originating from the developing countries such as China. Gap in Accessing Quality Education Currently, education sectors plays an important role in reducing the gap between the rich and poor. Moreover, various employers are seeking workers with quality educational background, which might be costly to achieve. As a result, such conditions tend to lock out bright but poor people from accessing quality education and jobs. Considering China’s education system, it offers nine years of compulsory learning and students acquire their admissions through examination scores, which in most cases are hailed abroad as a paradigm for educational equity. Such impression tends to reinforce Chinese students to stellar their international performance, which built a reputational myth (Gao, 2014). While there have been phenomenal expansion in the country’s basic education for the Chinese and quadrupling the output of the college graduates within the past years, China has also created the system discriminating against the less wealthy and properly connected citizens. As a result, the state thwarts their social mobility in each step with the bureaucratic and financial barriers. The existence of a wide gap in the educational opportunities available between students from the rural areas and those from urban, which is one of the major culprits. In China, 60 million students living in the rural areas are left behind by their parents under the care of their grandparents while parents seek work in faraway cities. While there are several peers attending schools equipped fully with state-of- the-art facilities and fully trained and experienced teachers, the rural students often huddle in the decrepit school structures and struggle in grasping the advanced subjects amid the dearth of the qualified teachers. From such background, the rural students stand virtually little chance while competing with their counterparts academically in the urban areas. For the migrant children following their parents to the cities, they have limited opportunity to quality education, as different government policies tend to foil their attempts at full integration. In China, the hukou system creates major challenges faced by children from poor families (Shah, Gao, & Mittal, 2015). The system is a residency status tying accessibility to the subsidized social services to the hometown of the people. As a result, it denies the rural children the opportunity and right to entering the public institutions. Most migrant students often experience relegation to the private institutions charging higher tuition and offering subpar education Barriers Associated With Employment and Career Development There are several barriers limiting the employment rates in China as well as inhibiting career development. One of the major barriers limiting employment in China is education requirements for specified jobs and stagnating cultural perception that view men as the people to work. In china, there has been persistence in the gender inequality in the low-income countries such as China, which made little progress in changing the status quo. Moreover, the country value male child education; thus, the boys receive more education than girls making it difficult for the ladies especially those rural areas rooted with old cultural views on girl-child education to secure employment (Nafziger, 2012). Currently, with the rate of globalization, employees are seeking educated and qualified employees irrespective of their geographical origin to assist in the achievement of the desired results. Despite the increment in the employment rates for women, they work in lower productive activities than the males and in the informal sectors. However, the case differs with the poor populations where both male and female work in the informal sectors though receives different payments depending on the amount of energy required. These activities often results in the earning gap. The amount of income determines one's level of education, which in turn determines employability. In Beijing, there are approximately eight million migrant employees. however, the preconditions of securing admissions in learning institutions intended less to ensure promotion of education equity rather than ensuring exacerbation if the discrimination. To some extent, parents switched their jobs, sued the state, and engineered divorces with an aim of getting around the onerous documentation requirement that tends to vary across the districts. Conclusion China has a huge population but lacks adequate measures of managing the income levels between the poor and the rich. As a result, the country suffers a wide gap between the rich and the poor. Such widening gap makes China as one of the most unequal countries across the globe according to the World Bank. Moreover, as one of the emerging global markets, the country’s rich population continue to glean most of the fruits associated with the transition from the system considered centrally-planned socialism to the market-oriented economy. Although the country’s per-capita income of the country increased and most people live on less than $1.25 in a day continue to plummet, the income inequality of the Chinese skyrocketed. However, besides income inequality, there are several factors contributing to the widening gap between the rich and the poor. These factors include the geographical location in which people from rural areas and far from the eastern coast lack adequate access to important resources and experience earn low incomes compared to their counterparts in the cities. As an emerging market, China is open to various economic markets, which contributes to its globalization levels. With globalization, there is increasing globalization; there is a high level of competition for the available jobs from both the locals and various states partners. Accessibility to quality education and barriers that inhibit employment and career development also play critical role widening the gap between the rich and the poor. 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Retrieved July 12, 2016, from http://blogs.wsj.com/economics/2015/03/26/china-is-one-of-most-unequal-countries-in-the-world-imf-paper-says/ World Bank. (2016). Making Globalization Work for the Poor | World Bank Live. Retrieved July 12, 2016, from http://live.worldbank.org/making-globalization-work-poor Wu, N. (2014, August 19). Income inequality in China and the urban-rural divide | Journalist's Resource. Retrieved July 12, 2016, from http://journalistsresource.org/studies/international/china/income-inequality-todays-china Xu, D., & Li, X. (2014). Income disparity in China: Crisis within economic miracle. New Jersey: World Scientific. Read More