CHINA DREAMS OF Gini

CHINA DREAMS OF GINI

And Common Prosperity

I have heard that the ruler of a state does not worry that his people are poor but that wealth is inequitably distributed. He does not worry that his people are few in number but that they are not harmonious. He does not worry that his people are unstable but that CHINA DREAMS OF Gini are insecure for, if wealth is equitably distributed, there is no poverty; if the people are harmonious they are not few in number; if the people are secure they are not unstable. Confucius, Analects

By the summer of 2021, poverty will be gone from China and everyone* will own a home, have an income, plenty of food and clothing, a good education, safe streets, health insurance and old-age care. Most of us won’t notice because our political tradition treats poverty as an embarrassment, not a responsibility.

But we will notice what comes next–the elimination of inequality by 2035–because even monkeys are sensitive to inequality and ours has reached an alltime high. It’s not just us. All primates react to unfairness and the fact that the top one percent control forty-four percent of the world’s wealth, while the bottom sixty percent squabble over two percent of it is an unparalleled PR opportunity because China has launched the biggest equality drive in world history. https://youtu.be/-KSryJXDpZo

 

One of the most significant differences between us and the CHINA DREAMS OF Gini is that they have shared the same civilizational goals for two thousand years and now they’re almost genetically imprinted. Another difference is that they’re willing to make sacrifices so that future generations can enjoy their fruits. Confucius laid out the goals in his Instruction to Rulers: “First enrich the people, then educate them.” Mao adopted them as national goals in 1950 and ‘Mao Thought’ is a record of his ideas about achieving them.

The steel-willed Deng found this intolerable and broke faith with the people by adding capitalism to the economic mix, telling planners that they must get China out of danger by June 1, 2021, the first centenary of the founding of the Communist Party Queried about the impact on what was then the world’s most egalitarian society he said, “We should simply allow some regions and people to get rich first and gradually push for common prosperity later.”

The raisons d’etre for Reform and Opening were twofold. The first was security, as he told the UN General Assembly in 1974, “Unless we develop, China will be bullied. For us, development is the only hard truth.” The second was the rapid creation of Confucius’ xiaokang, moderately prosperous, society the foundation for his radically egalitarian datong society.

China will reach xiaokang in 2021. Poverty will be gone and everyone will have an income, access to education, plenty of food and clothing, safe streets, health insurance and old age care (and 5G!) and ninety-nine percent of the bottom income quartile will own their homes outright. Since poor people are unimportant to Western politicians and media, this achievement will be either ignored or scoffed at. But China’s next act will be harder to ignore.

Social inequality is measured by the Gini index, the distribution of a nation’s income across income percentiles, and a higher index indicates that high income individuals receive a larger percentage of the total income. World champion Finland has kept its Gini around 27.1 for a decade (its Quality of Life is correspondingly high) while laggard America’s rose from 40.4 in 2010 to 48.5 last year, the highest ever recorded. Meantime, China’s fell from 43.7 in 2010 to 38.6 in 2015, en route to 33.5 in 2021 and a projected 0.271 by 2035.

Wealth distribution, however, is a different matter. The richest ten percent of Finnish households owned 45 percent of all assets in 2013 and 47 percent in 2016. America’s top ten percent own 77 percent of all US assets but China’s wealth distribution is more difficult to calculate. There, everyone owns a home and own one third of the nation’s assets–including the world’s largest banks, media and insurance companies–in common.

This shift in national priorities was presaged by Deng Xiaoping in early 1992, “We should allow some regions and people to get rich first and gradually push for common prosperity later”.

Some people and some regions did get rich, now it’s ‘later,’ and ninety-eight percent of poor Chinese own their homes free and clear. In 2012, when the country’s GINI was 42.2, Xi began conditioning promotions not only on provincial GDP growth, but on GINI reduction, but the process was already well advanced and the Gini coefficient[1] is dropping like a stone.

Extreme poverty will be gone next year and everyone will have a home, a job, plenty of food, education, safe streets, health and old age care. Chinese mothers and infants will be less likely than ours to die in childbirth, their children will graduate from high school three years ahead of ours and live longer, healthier lives, and we will have more drug addicts, suicides and executions, more homeless, poor, hungry and imprisoned people than China. All thanks to planning. J. M. Keynes[1] said, “Planning should take place in a community in which as many people as possible, both leaders and followers, wholly share your own moral position. Moderate planning will be safe if those carrying it out are rightly orientated in their minds and hearts to the moral issue.”

When Confucius talked about enriching the people he used the word collectively to describe a stage he called xiaokang, or ‘moderate prosperity.’ In 1978 Deng Xiaoping called on the Party to achieve xiaokang by June 1, 2021, the centenary of the founding of the Communist Party. In 2011 Premier Wen Jiabao defined xiaokang as ‘a society in which no one is poor and everyone receives an education, has paid employment, more than enough food and clothing, access to medical services, old-age support, a home and a comfortable life.’ They will reach xiaokang on time and on budget, on June 1, 2021.

China’s Social Credit Dàtóng Dreams

Confucius’ second goal is far more ambitious. When he said ‘education,’ he meant emancipation from egoic bondage by communal effort (all Chinese goals, including liberation, are collective) into a state he called dàtóng. Mao loved and often quoted a definition of dàtóng from Kang Youwei’s Commentary on Liyun, Liyun Zhu:

Now to have states, families, and selves is to allow each individual to maintain a sphere of selfishness. This infracts utterly the Universal Principle, gongli, and impedes progress…Therefore, not only states should be abolished, so that there would be no more struggle between the strong and the weak; families should also be done away with, so that there would no longer be inequality of love and affection among men; and, finally, selfishness itself should be banished, so that goods and services would not be used for private ends. … The only true way is sharing the world in common by all, tienxia weigong… To share in common is to treat each and every one alike. There should be no distinction between high and low, no discrepancy between rich and poor, no segregation of human races, no inequality between sexes…All should be educated and supported with the common property; none should depend on private possession…This is the way of the Great Community, dàtóng, which prevailed in the Age of Universal Peace.

Hoping that China could achieve dàtóng in one generation, Mao initiated the Great Leap Forward and was dropped from the leadership after it failed. In his public apology he said, “We rushed into a great catastrophe. The communes were organized too quickly. The Great Leap has been a partial failure for which we have paid a high price. The chaos was on a grand scale and I take responsibility for it..The transition to a dàtóng society might take longer than I had envisaged, perhaps as many as twenty Five Year Plans, but the drive to attain it should never be abandoned.” Every leader has reiterated Mao’s dàtóng pledge (as does Taiwan’s national anthem) and, though the Party has not set a deadline, President Xi set two intermediate goals:

  1. Between 2021-2035, China will focus on becoming more egalitarian–in both wealth and income–than Finland, the current world leader. Since Xi began promoting provincial officials based on their GINI statistics in 2012, progress has been rapid and the 2035 goal seems realistic.
  2. By 2049, “China will be a great, modern socialist country, prosperous, strong, democratic, culturally advanced, harmonious and beautiful, and have built a world without conflicts, with equal development opportunities for everyone and with all peoples blessed with happiness.”

These shared goals, The Chinese Dream, explain much of the difference between their politics and ours: why they have no ‘opposition parties’ for example. Everyone knows where they’re going, everyone wants to get there and everyone knows that, by definition, no-one will be there until everyone’s there. Since the current leaders are making satisfactory progress towards them, opposition is only wasteful.

“The Taboo Against Owning and Knowing Too Much”, which would later appear in the book, The Dreaded Gom-Boo.

“As My devotee, you should live in a community where you share all the goods and energies of life. Everyone should live as well as possible, but the concepts of sharing and cooperation are basic to equalizing the trends toward egoic accumulation as well as basic to releasing you from relational bondage. . . As My devotee, your fundamental activity is not to accumulate but to eliminate, to release, to stand free. . . The ego is the principle of accumulation, the self-bound knot, the ‘castle in the air’, the superior, self-protected adversary of all other beings. Therefore, understand yourself Spiritually, and in real human terms begin to practice a personal discipline that characterizes true renunciation, or commitment to Happiness rather than emptiness, and on that basis, become capable of a different way of living with other people whereby many great and beautiful things can be created and enjoyed by everyone.”

www.inequality.org | inequality@ips-dc.org

Social divisions cause stress, anxiety and doubts about self-worth, write Richard Wilkinson, Kate Pickett and Wanda Wyporska, while Nicholas Falk believes housing wealth is at the root of the problem. How inequality is growing worldwide, Journal, 9 September).

The sense of being “left behind” contributes, as he says, to political polarisation – but that is a symptom of the many wider effects of inequality which research since the 1970s has established. Thomas Piketty’s analysis of inequality in Capital in the Twenty-First Century showed how the greatest divisions are in wealth distribution, not income, and most wealth in the UK is tied up in housing. If the UK is to become a fairer society, then we have to tackle the “unearned increment” resulting from the uplift in land values.

Between 1950-1975, under US embargoes on grain, technology, and finance, and exclusion from the family of nations, Mao grew China’s economy faster than any in history but as it grew, so did threats of nuclear annihilation.

Nevertheless, China is attempting to lead the world in both income equality and wealth equality by 2035.

While our media have managed to distract attention from China’s creation of xiaokang, hiding its battle with inequality will prove more difficult: humans, even primates, are extremely sensitive to unfairness and much of Western society today is perceived as being unfair.

China’s rural, inland people have always been poorer than their urban, coastal cousins and, because the country couldn’t build homes and cities fast enough, inlanders have been held in place by residential hukous.

But economists[1] have discovered that their inequality was exaggerated. The cost of living in Shanghai and Shenzhen is much higher because land prices and basic food costs are much higher. Housing quality is the same in both regions and basic food costs in rural areas are half Beijing’s. Researchers analyzed the full range of goods and services and concluded that incomes from rural areas should be increased by fifty percent to make them comparable.

Then, when they adjusted for where people actually live the difference shrank further. Until recently, demographers counted people’s hukous–where they were registered to live–rather than where they actually lived. As migrant workers’ numbers rose to three hundred million in 2018, their movement severely distorted the statistics. In real life, the coastal provinces have millions more residents than their registered populations and the migrant-sending inland provinces have millions less. When someone moved from the interior to the coast, they lifted inequality indicators because she contributed to income in the coastal destination but was still counted as living in her rural home. Once they corrected[2] this counting error, analysts found that regional inequality has declined by forty-two percent since 1978, at 1.1 percent annually.

In 2002, it took fourteen Guizhou workers to earn as much as the average[3] Shanghainese, but by 2017, it took only five. Nor was the structural gap as painful as it sounds. Across the country, everyone saw everyone else they could see getting richer each year and, to rural villagers buying their first pickup truck, Shanghai’s glitzy lifestyle was no more relevant than New York’s.

Higher GINI coefficients signify greater inequality in wealth distribution, with 0 being complete equality, whereas a value near 1 can arise in a situation where everybody has zero wealth except a very small minority. “The top 10 percent owned 71 percent of world wealth, and the Gini coefficient for the global distribution of wealth is estimated to be 0.804, indicating greater inequality than that observed in the global distribution of consumption or income.”[4]

Global Wealth Inequality∗ Gabriel Zucman (UC Berkeley and NBER)February 7, 2019

https://wid.world

CHINA DREAMS OF Gini

CHINA DREAMS OF Gini

CHINA DREAMS OF Gini

CHINA DREAMS OF Gini

the key to legislative unanimity is data[1]

China is a giant trial portfolio with millions of trials going on everywhere. Innovations in everything from healthcare to poverty reduction, education, energy, trade and transportation are being trialled in different communities. Every one of China’s six-hundred sixty-two cities is experimenting: Shanghai is experimenting with free trade zones; Guizhou with poverty reduction; twenty-three cities with education reforms; Northeastern provinces with SOE reform: pilot schools, pilot cities, pilot hospitals, pilot markets, pilot everything. Mayors and governors, the Primary Investigators, share their ‘lab results’ at the Central Party School and publish them in ‘scientific journals,’ the State-owned newspapers. Major policies undergo ‘clinical trials,’ beginning in small towns that generate and analyze test data. If the stats look good, they’ll add test sites and do long-term follow-ups.

They test and tweak for 10-30 years then ask the 3,000-member People’s Congress to review the data and authorize national trials in three major provinces. If a national trial is successful the State Council polishes the plan and takes it back to the 3,000 Congresspeople for a final vote. It’s very transparent and, if you have good data and I don’t, your bill gets passed and mine doesn’t. People’s Congress votes are nearly unanimous because the legislation is backed by reams of data. This allows China to accomplish a great deal in a short time: your winning solution will be quickly propagated throughout the country, you’ll be a front page hero and you’ll be invited to high-level meetings in Beijing and promoted. As you can imagine, the competition to solve the country’s problems is intense.

China in 2021

The process is slow[2] and even promised laws can falter in the absence of solid data. Congress delayed the Three Gorges Dam Construction Act for twenty years while a demonstration dam was constructed and, after Beijing promised to make genetically modified seeds available to farmers by 2020, legislators found[3] half the country opposed to GM, (eleven percent considered it ‘a bioterrorism weapon aimed at China’) and forced withdrawal of the legislation. But the duration, transparency and solidity of the ensuing data ensures public acceptance and rapid legislative implementation.

[1] J.M. Keynes letter to Friedrich A. von Hayek, on his ‘The Road to Serfdom,’ June 28, 1944. In the Friedrich Hayek Collection at the Hoover Institution, Stanford University.

[1] Robin Daverman, What kind of democracy do the Chinese want? Quora, Oct. 19, 2017

[2] Authoritarian Gridlock? Understanding Delay in the Chinese Legislative System Rory Truex. Journal of Comparative Political Studies, April 2018

[3] Public perception of genetically-modified (GM) food: A Nationwide Chinese Consumer Study. Kai Cui & Sharon P. Shoemaker. npj Science of Food volume 2, Article number: 10 (2018)

[1] Spatial Price Differences and Inequality in the People’s Republic of China: Housing Market Evidence,” Chao Li & John Gibson, 2014. ”Asian Development Review, MIT Press, vol. 31(1), pages 92-120, March.

[2] Regional Inequality in China allowing for Spatial Cost-of-Living Differences: Evidence from a Hedonic Analysis of Apartment Prices. Chao Li, John Gibson. IDEAS.

[3] China’s Got a $46,000 Wealth Gap Problem

Bloomberg News. May 21, 2018

Confucian attitudes are also driving the great rebalancing. Every Chinese can quote the Master’s judgement that, “In a well governed country poverty is something to be ashamed of. In a badly governed country, wealth is something to be ashamed of. Thus, the ruler of a state need not worry that his people are poor but that wealth is inequitably distributed..For if wealth is equitably distributed, there is no poverty.”

In 2012 Xi began promoting officials based on their improvement in local GINI scores and, as usual, Trial Spots played a starring role. Regional capital Chengdu (pop. fifteen million) imposed a progressive tax on luxury real estate to finance low-income housing. Five years later 300,000 handicapped, elderly, structurally unemployed and large, poor families had new homes with upgraded infrastructure. By 2018, everyone in Chengdu owned a home and one shop owner⁠1 who advertised free meals for needy people confessed that only two had taken up her invitation.

Average urban households today have savings of $130,000 and the Chinese are the most optimistic⁠2 people on earth and international comparisons support their attitude. In 2018, citizens in coastal Guangdong Province were five times richer than those in inland Gansu–but Gansu people were better off than Armenians and Ukrainians–while urbanites in Beijing, Shanghai, Tianjin, and Jiangsu earned more than the US average. The gap will close further by 2025:

1 Chinese woman offers oodles of free noodles to the needy, but no one seems to want them. SCMP. Kinling Lo, 20 Jul, 2018

2 Chinese people are most likely to feel the world is getting better. Yougov. January 05, 2016.

In a nation obsessed with equality of opportunity and led by a Party ideologically committed to it, leveling the playing field–at least for one’s own offspring–is a source of constant concern, according to Xiong Xuan’an, the zhuàngyuán in 2017, “People like me are from middle-class families. We don’t have to worry about food or clothes. Our parents are educated. We were born in big cities like Beijing. We simply got better education resources than the rest. Students from other places and rural areas are not able to get these benefits. It made my learning path easier and the top scorers nowadays, generally speaking, come from upper class families and are good at studying.”

So fierce is parental concern that, when the Ministry proposed decreasing homework, jianfu, parents objected that, by betraying its responsibility for making education a force for social advancement, the Ministry was compelling parents to fill the vacuum with extracurricular learning. Otherwise, who would to help children stand out from their peers and gain admission to good universities, “The government used to educate our children but now they don’t want to shoulder the responsibility so they’re throwing it back onto us.” Most insisted that their children were perfectly capable of handling heavier workloads and expressed nostalgia for ‘the nineties culture when the state supported students working day and night.’ Even poor Chinese parents suffer from university anxiety to a degree seen only in upper-class families in the West.

In preparation for President Xi’s promised push for equality between 2021 and 2035, the Education Ministry has already begun focusing on rural and disadvantaged children. In 2010 it sponsored a Trial Spot, the West China Enrollment Collaboration Program, to increase student enrollment in poorer central and western regions. In 2016 (over city parents’ heated objections), the Ministry pushed urban areas to admit migrant children to urban gaokao and provide them with urban university places and, two years later, eighty percent of migrant children were enrolled in city schools and ninety percent were receiving financial support that will continue through university. By 2019 their distance from national averages, though still wide, had narrowed by two-thirds.

The Ministry has also doubled rural education support since 2015 to reduce regional disparities in school access, teaching standards and even protein adequacy, yet children from underdeveloped areas still struggled to win places in major universities. By 2019, country schools began limiting their primary class size to forty-five and employing a minimum of ten senior, physical education, music and fine arts teachers for every thousand children, while raising teachers’s pay to match local officials’. The Ministry added favorable university application policies and scholarships for rural graduates at seventy-five national universities and pledged that the advantages will persist after rural areas emerge from poverty. In 2019 the Ministry established Trial Spots in poor areas of Anhui, Henan, Shaanxi and Gansu, offering promising city teachers promotion to Chief Teachers at rural primary and middle schools, and encouraging them to explore their own ideas for lifting the quality of education. Their success will be replicated regionally in the next phase.

Beijing politicians regularly urge provincial officials to ‘comprehensively address’ problems in their areas, and a Trial Spot in poor Guizhou Province is emblematic of a comprehensive approach. Children were coming to school on empty stomachs, so the province provided all schools with canteens and funds to buy produce directly from poor local farmers and prepare free lunches for its fifteen-million pupils. It added monthly stipends for 1.7 million registered[1] poor students and focused on boosting their confidence in education as the best way to lift their families out of poverty. The education department also called on its best teachers and administrators for help. Zhang Yan, an outstanding principal in Zunyi City (pop. one-million), said, “I’ve focused my plan on coaching teachers in the poverty-stricken areas rather than giving lectures at rural schools.” By 2020, Guizhou had relocated two million poor people from mountainous areas considered uninhabitable into urban areas and enrolled their 130,000 children in 1,600 schools near their new homes. By year’s end, the province will have completed three hundred nurseries and junior high schools for a further fifty-thousand relocated children.

China has funded improved basic facilities, simplified the recruitment process for poor students and created preferential university admission policies for poor students and, by 2020, the Education Ministry had rolled out the most promising pedagogic techniques nationwide, disadvantaged children were testing as well as Europe’s fifteen-year-olds, artificial intelligence was part of the national curriculum, and Britain was spending fifty-million dollars training its teachers in China and translating its textbooks.

[1] Their families are officially enrolled in the government’s anti-poverty campaign.

Though we happily compare heritable traits like height, good looks and athletic ability, we are reluctant to do the same with intelligence, some even claiming that IQ is irrelevant to life outcomes. Yet we boast about one percent of us, our Ashkenazi Jews who win forty percent of our Nobel Prizes. The Chinese have no such ambivalence. Since the dawn of time they have known that intelligence is heritable and do everything to nurture it. Only brilliant students can hope to marry into scholarly families and, every generation, cultural opposition to wedding unintelligent men eliminates their genomic inheritance from the national gene pool.

This process of elimination has been going on for so long that Ron Unz[1] found Chinese intelligence almost immune to most socio-economic factors. Healthy Swiss are fifty times richer and receive twice the schooling of poorly nourished rural Chinese (who have also carried a heavy disease burden for generations) yet Chinese IQs are consistently higher, “The reported Chinese PISA[2] scores are far above those of the United States and nearly every European country, many of which are almost totally urbanized and have incomes ten times that of China. It is almost unimaginable that any non-East Asian population of rural villagers with annual incomes in the $1,000 range would have tested IQs very close to 100 [the median]. We would certainly expect Chinese numbers to rise further as the country continues to develop, but my point is that East Asian IQs seem to possess a uniquely high floor compared with those of any other population.”

*98% of the bottom quartile and 90% of the top three quartiles.

[1] The East Asian Exception to Socio-Economic IQ Influences

RON UNZ • THE AMERICAN CONSERVATIVE • JULY 18, 2012 •

[2] Programme for International Student Assessment (PIS ) is a worldwide study by the Organisation for Economic Co-operation and Development (OECD) to evaluate educational systems by measuring 15-year-old school pupils’ scholastic performance on mathematics, science, and reading.

[1] The GINI coefficient, developed by Italian statistician and sociologist Corrado Gini measures income inequality. A lower number indicates greater equality.

  1. The GINI coefficient, developed by Italian statistician and sociologist Corrado Gini, measures income inequality. A lower number indicates greater equality.

And Common Prosperity

 

I have heard that the ruler of a state does not worry that his people are poor but that wealth is inequitably distributed. He does not worry that his people are few in number but that they are not harmonious. He does not worry that his people are unstable but that they are insecure for, if wealth is equitably distributed, there is no poverty; if the people are harmonious they are not few in number; if the people are secure they are not unstable. Confucius, Analects

By the summer of 2021, poverty will be gone from China and everyone* will own a home, have an income, plenty of food and clothing, a good education, safe streets, health insurance and old age care. Most of us won’t notice because our political tradition treats poverty as an embarrassment, not a responsibility.

But we will notice what comes next–the elimination of inequality by 2035–because even monkeys are sensitive to inequality and ours has reached an alltime high. It’s not just us. All primates react to unfairness and the fact that the top one percent control forty-four percent of the world’s wealth, while the bottom sixty percent squabble over two percent of it is an unparalleled PR opportunity because China has launched the biggest equality drive in world history. https://youtu.be/-KSryJXDpZo

 

CHINA DREAMS OF Gini

One of the most significant differences between us and the Chinese is that they have shared the same civilizational goals for two thousand years and now they’re almost genetically imprinted. Another difference is that they’re willing to make sacrifices so that future generations can enjoy their fruits. Confucius laid out the goals in his Instruction to Rulers: “First enrich the people, then educate them.” Mao adopted them as national goals in 1950 and ‘Mao Thought’ is a record of his ideas about achieving them.

The steel-willed Deng found this intolerable and broke faith with the people by adding capitalism to the economic mix, telling planners that they must get China out of danger by June 1, 2021, the first centenary of the founding of the Communist Party Queried about the impact on what was then the world’s most egalitarian society he said, “We should simply allow some regions and people to get rich first and gradually push for common prosperity later.”

The raisons d’etre for Reform and Opening were twofold. The first was security, as he told the UN General Assembly in 1974, “Unless we develop, China will be bullied. For us, development is the only hard truth.” The second was the rapid creation of Confucius’ xiaokang, moderately prosperous, society the foundation for his radically egalitarian datong society.

China will reach xiaokang in 2021. Poverty will be gone and everyone will have an income, access to education, plenty of food and clothing, safe streets, health insurance and old age care (and 5G!) and ninety-nine percent of the bottom income quartile will own their homes outright. Since poor people are unimportant to Western politicians and media, this achievement will be either ignored or scoffed at. But China’s next act will be harder to ignore.

Social inequality is measured by the Gini index, the distribution of a nation’s income across income percentiles, and a higher index indicates that high income individuals receive a larger percentage of the total income. World champion Finland has kept its Gini around 27.1 for a decade (its Quality of Life is correspondingly high) while laggard America’s rose from 40.4 in 2010 to 48.5 last year, the highest ever recorded. Meantime, China’s fell from 43.7 in 2010 to 38.6 in 2015, en route to 33.5 in 2021 and a projected 0.271 by 2035.

Wealth distribution, however, is a different matter. The richest ten percent of Finnish households owned 45 percent of all assets in 2013 and 47 percent in 2016. America’s top ten percent own 77 percent of all US assets but China’s wealth distribution is more difficult to calculate. There, everyone owns a home and own one third of the nation’s assets–including the world’s largest banks, media and insurance companies–in common.

This shift in national priorities was presaged by Deng Xiaoping in early 1992, “We should allow some regions and people to get rich first and gradually push for common prosperity later”.

Some people and some regions did get rich, now it’s ‘later,’ and ninety-eight percent of poor Chinese own their homes free and clear. In 2012, when the country’s GINI was 42.2, Xi began conditioning promotions not only on provincial GDP growth, but on GINI reduction, but the process was already well advanced and the Gini coefficient[1] is dropping like a stone.

Extreme poverty will be gone next year and everyone will have a home, a job, plenty of food, education, safe streets, health and old age care. CHINA DREAMS OF Gini mothers and infants will be less likely than ours to die in childbirth, their children will graduate from high school three years ahead of ours and live longer, healthier lives, and we will have more drug addicts, suicides and executions, more homeless, poor, hungry and imprisoned people than China. All thanks to planning. J. M. Keynes[1] said, “Planning should take place in a community in which as many people as possible, both leaders and followers, wholly share your own moral position. Moderate planning will be safe if those carrying it out are rightly orientated in their minds and hearts to the moral issue.”

When Confucius talked about enriching the people he used the word collectively to describe a stage he called xiaokang, or ‘moderate prosperity.’ In 1978 Deng Xiaoping called on the Party to achieve xiaokang by June 1, 2021, the centenary of the founding of the Communist Party. In 2011 Premier Wen Jiabao defined xiaokang as ‘a society in which no one is poor and everyone receives an education, has paid employment, more than enough food and clothing, access to medical services, old-age support, a home and a comfortable life.’ They will reach xiaokang on time and on budget, on June 1, 2021.

About Work and Wages in China

Confucius’ second goal is far more ambitious. When he said ‘education,’ he meant emancipation from egoic bondage by communal effort (all Chinese goals, including liberation, are collective) into a state he called dàtóng. Mao loved and often quoted a definition of dàtóng from Kang Youwei’s Commentary on Liyun, Liyun Zhu:

Now to have states, families, and selves is to allow each individual to maintain a sphere of selfishness. This infracts utterly the Universal Principle, gongli, and impedes progress…Therefore, not only states should be abolished, so that there would be no more struggle between the strong and the weak; families should also be done away with, so that there would no longer be inequality of love and affection among men; and, finally, selfishness itself should be banished, so that goods and services would not be used for private ends. … The only true way is sharing the world in common by all, tienxia weigong… To share in common is to treat each and every one alike. There should be no distinction between high and low, no discrepancy between rich and poor, no segregation of human races, no inequality between sexes…All should be educated and supported with the common property; none should depend on private possession…This is the way of the Great Community, dàtóng, which prevailed in the Age of Universal Peace.

Hoping that China could achieve dàtóng in one generation, Mao initiated the Great Leap Forward and was dropped from the leadership after it failed. In his public apology he said, “We rushed into a great catastrophe. The communes were organized too quickly. The Great Leap has been a partial failure for which we have paid a high price. The chaos was on a grand scale and I take responsibility for it..The transition to a dàtóng society might take longer than I had envisaged, perhaps as many as twenty Five Year Plans, but the drive to attain it should never be abandoned.” Every leader has reiterated Mao’s dàtóng pledge (as does Taiwan’s national anthem) and, though the Party has not set a deadline, President Xi set two intermediate goals:

  1. Between 2021-2035, CHINA DREAMS OF Gini will focus on becoming more egalitarian–in both wealth and income–than Finland, the current world leader. Since Xi began promoting provincial officials based on their GINI statistics in 2012, progress has been rapid and the 2035 goal seems realistic.
  2. By 2049, “China will be a great, modern socialist country, prosperous, strong, democratic, culturally advanced, harmonious and beautiful, and have built a world without conflicts, with equal development opportunities for everyone and with all peoples blessed with happiness.”

These shared goals, The CHINA DREAMS OF Gini, explain much of the difference between their politics and ours: why they have no ‘opposition parties’ for example. Everyone knows where they’re going, everyone wants to get there and everyone knows that, by definition, no-one will be there until everyone’s there. Since the current leaders are making satisfactory progress towards them, opposition is only wasteful.

“The Taboo Against Owning and Knowing Too Much”, which would later appear in the book, The Dreaded Gom-Boo.

“As My devotee, you should live in a community where you share all the goods and energies of life. Everyone should live as well as possible, but the concepts of sharing and cooperation are basic to equalizing the trends toward egoic accumulation as well as basic to releasing you from relational bondage. . . As My devotee, your fundamental activity is not to accumulate but to eliminate, to release, to stand free. . . The ego is the principle of accumulation, the self-bound knot, the ‘castle in the air’, the superior, self-protected adversary of all other beings. Therefore, understand yourself Spiritually, and in real human terms begin to practice a personal discipline that characterizes true renunciation, or commitment to Happiness rather than emptiness, and on that basis, become capable of a different way of living with other people whereby many great and beautiful things can be created and enjoyed by everyone.”

www.inequality.org | inequality@ips-dc.org

Social divisions cause stress, anxiety and doubts about self-worth, write Richard Wilkinson, Kate Pickett and Wanda Wyporska, while Nicholas Falk believes housing wealth is at the root of the problem. How inequality is growing worldwide, Journal, 9 September).

The sense of being “left behind” contributes, as he says, to political polarisation – but that is a symptom of the many wider effects of inequality which research since the 1970s has established. Thomas Piketty’s analysis of inequality in Capital in the Twenty-First Century showed how the greatest divisions are in wealth distribution, not income, and most wealth in the UK is tied up in housing. If the UK is to become a fairer society, then we have to tackle the “unearned increment” resulting from the uplift in land values.

Between 1950-1975, under US embargoes on grain, technology, and finance, and exclusion from the family of nations, Mao grew CHINA DREAMS OF Gini economy faster than any in history but as it grew, so did threats of nuclear annihilation.

Nevertheless, China is attempting to lead the world in both income equality and wealth equality by 2035.

While our media have managed to distract attention from China’s creation of xiaokang, hiding its battle with inequality will prove more difficult: humans, even primates, are extremely sensitive to unfairness and much of Western society today is perceived as being unfair.

China’s rural, inland people have always been poorer than their urban, coastal cousins and, because the country couldn’t build homes and cities fast enough, inlanders have been held in place by residential hukous.

But economists[1] have discovered that their inequality was exaggerated. The cost of living in Shanghai and Shenzhen is much higher because land prices and basic food costs are much higher. Housing quality is the same in both regions and basic food costs in rural areas are half Beijing’s. Researchers analyzed the full range of goods and services and concluded that incomes from rural areas should be increased by fifty per cent to make them comparable.

Then, when they adjusted for where people actually live the difference shrank further. Until recently, demographers counted people’s hukous–where they were registered to live–rather than where they actually lived. As migrant workers’ numbers rose to three hundred million in 2018, their movement severely distorted the statistics. In real life, the coastal provinces have millions more residents than their registered populations and the migrant-sending inland provinces have millions less. When someone moved from the interior to the coast, they lifted inequality indicators because she contributed to income in the coastal destination but was still counted as living in her rural home. Once they corrected[2] this counting error, analysts found that regional inequality has declined by forty-two percent since 1978, at 1.1 percent annually.

In 2002, it took fourteen Guizhou workers to earn as much as the average[3] Shanghainese, but by 2017, it took only five. Nor was the structural gap as painful as it sounds. Across the country, everyone saw everyone else they could see getting richer each year and, to rural villagers buying their first pickup truck, Shanghai’s glitzy lifestyle was no more relevant than New York’s.

Higher GINI coefficients signify greater inequality in wealth distribution, with 0 being complete equality, whereas a value near 1 can arise in a situation where everybody has zero wealth except a very small minority. “The top 10 percent owned 71 percent of world wealth, and theCHINA DREAMS OF Gini coefficient for the global distribution of wealth is estimated to be 0.804, indicating greater inequality than that observed in the global distribution of consumption or income.”[4]

Global Wealth Inequality∗ Gabriel Zucman (UC Berkeley and NBER)February 7, 2019

https://wid.world

the key to legislative unanimity is data[1]

CHINA DREAMS OF Gini is a giant trial portfolio with millions of trials going on everywhere. Innovations in everything from healthcare to poverty reduction, education, energy, trade and transportation are being trialled in different communities. Every one of China’s six-hundred sixty-two cities is experimenting: Shanghai is experimenting with free trade zones; Guizhou with poverty reduction; twenty-three cities with education reforms; Northeastern provinces with SOE reform: pilot schools, pilot cities, pilot hospitals, pilot markets, pilot everything. Mayors and governors, the Primary Investigators, share their ‘lab results’ at the Central Party School and publish them in ‘scientific journals,’ the State-owned newspapers. Major policies undergo ‘clinical trials,’ beginning in small towns that generate and analyze test data. If the stats look good, they’ll add test sites and do long-term follow-ups.

They test and tweak for 10-30 years then ask the 3,000-member People’s Congress to review the data and authorize national trials in three major provinces. If a national trial is successful the State Council polishes the plan and takes it back to the 3,000 Congresspeople for a final vote. It’s very transparent and, if you have good data and I don’t, your bill gets passed and mine doesn’t. People’s Congress votes are nearly unanimous because the legislation is backed by reams of data. This allows CHINA DREAMS OF Gini to accomplish a great deal in a short time: your winning solution will be quickly propagated throughout the country, you’ll be a front page hero and you’ll be invited to high-level meetings in Beijing and promoted. As you can imagine, the competition to solve the country’s problems is intense.

The process is slow[2] and even promised laws can falter in the absence of solid data. Congress delayed the Three Gorges Dam Construction Act for twenty years while a demonstration dam was constructed and, after Beijing promised to make genetically modified seeds available to farmers by 2020, legislators found[3] half the country opposed to GM, (eleven percent considered it ‘a bioterrorism weapon aimed at China’) and forced withdrawal of the legislation. But the duration, transparency and solidity of the ensuing data ensures public acceptance and rapid legislative implementation.

[1] J.M. Keynes letter to Friedrich A. von Hayek, on his ‘The Road to Serfdom,’ June 28, 1944. In the Friedrich Hayek Collection at the Hoover Institution, Stanford University.

[1] Robin Daverman, What kind of democracy do the CHINA DREAMS OF Gini want? Quora, Oct. 19, 2017

[2] Authoritarian Gridlock? Understanding Delay in the Chinese Legislative System Rory Truex. Journal of Comparative Political Studies, April 2018

[3] Public perception of genetically-modified (GM) food: A Nationwide CHINA DREAMS OF Gini Consumer Study. Kai Cui & Sharon P. Shoemaker. npj Science of Food volume 2, Article number: 10 (2018)

[1] Spatial Price Differences and Inequality in the People’s Republic of China: Housing Market Evidence,” Chao Li & John Gibson, 2014. ”Asian Development Review, MIT Press, vol. 31(1), pages 92-120, March.

[2] Regional Inequality in China allowing for Spatial Cost-of-Living Differences: Evidence from a Hedonic Analysis of Apartment Prices. Chao Li, John Gibson. IDEAS.

[3] China’s Got a $46,000 Wealth Gap Problem

Bloomberg News. May 21, 2018

Confucian attitudes are also driving the great rebalancing. Every Chinese can quote the Master’s judgement that, “In a well governed country poverty is something to be ashamed of. In a badly governed country, wealth is something to be ashamed of. Thus, the ruler of a state need not worry that his people are poor but that wealth is inequitably distributed..For if wealth is equitably distributed, there is no poverty.”

In 2012 Xi began promoting officials based on their improvement in local GINI scores and, as usual, Trial Spots played a starring role. Regional capital Chengdu (pop. fifteen million) imposed a progressive tax on luxury real estate to finance low-income housing. Five years later 300,000 handicapped, elderly, structurally unemployed and large, poor families had new homes with upgraded infrastructure. By 2018, everyone in Chengdu owned a home and one shop owner⁠1 who advertised free meals for needy people confessed that only two had taken up her invitation.

Average urban households today have savings of $130,000 and the Chinese are the most optimistic⁠2 people on earth and international comparisons support their attitude. In 2018, citizens in coastal Guangdong Province were five times richer than those in inland Gansu–but Gansu people were better off than Armenians and Ukrainians–while urbanites in Beijing, Shanghai, Tianjin, and Jiangsu earned more than the US average. The gap will close further by 2025:

The Great Proletarian Cultural Revolution

1 Chinese woman offers oodles of free noodles to the needy, but no one seems to want them. SCMP. Kinling Lo, 20 Jul, 2018

2 Chinese people are most likely to feel the world is getting better. Yougov. January 05, 2016.

In a nation obsessed with equality of opportunity and led by a Party ideologically committed to it, leveling the playing field–at least for one’s own offspring–is a source of constant concern, according to Xiong Xuan’an, the zhuàngyuán in 2017, “People like me are from middle-class families. We don’t have to worry about food or clothes. Our parents are educated. We were born in big cities like Beijing. CHINA DREAMS OF Gini simply got better education resources than the rest. Students from other places and rural areas are not able to get these benefits. It made my learning path easier and the top scorers nowadays, generally speaking, come from upper class families and are good at studying.”

So fierce is parental concern that, when the Ministry proposed decreasing homework, jianfu, parents objected that, by betraying its responsibility for making education a force for social advancement, the Ministry was compelling parents to fill the vacuum with extracurricular learning. Otherwise, who would to help children stand out from their peers and gain admission to good universities, “The government used to educate our children but now they don’t want to shoulder the responsibility so they’re throwing it back onto us.” Most insisted that their children were perfectly capable of handling heavier workloads and expressed nostalgia for ‘the nineties culture when the state supported students working day and night.’ Even poor Chinese parents suffer from university anxiety to a degree seen only in upper-class families in the West.

In preparation for President Xi’s promised push for equality between 2021 and 2035, the Education Ministry has already begun focusing on rural and disadvantaged children. In 2010 it sponsored a Trial Spot, the West China Enrollment Collaboration Program, to increase student enrollment in poorer central and western regions. In 2016 (over city parents’ heated objections), the Ministry pushed urban areas to admit migrant children to urban gaokao and provide them with urban university places and, two years later, eighty percent of migrant children were enrolled in city schools and ninety percent were receiving financial support that will continue through university. By 2019 their distance from national averages, though still wide, had narrowed by two-thirds.

The Ministry has also doubled rural education support since 2015 to reduce regional disparities in school access, teaching standards and even protein adequacy, yet children from underdeveloped areas still struggled to win places in major universities. By 2019, CHINA DREAMS OF Gini country schools began limiting their primary class size to forty-five and employing a minimum of ten senior, physical education, music and fine arts teachers for every thousand children, while raising teachers’ pay to match local officials.  The Ministry added favorable university application policies and scholarships for rural graduates at seventy-five national universities and pledged that the advantages will persist after rural areas emerge from poverty. In 2019 the Ministry established Trial Spots in poor areas of Anhui, Henan, Shaanxi and Gansu, offering promising city teachers promotion to Chief Teachers at rural primary and middle schools, and encouraging them to explore their own ideas for lifting the quality of education. Their success will be replicated regionally in the next phase.

Beijing politicians regularly urge provincial officials to ‘comprehensively address’ problems in their areas, and a Trial Spot in poor Guizhou Province is emblematic of a comprehensive approach. Children were coming to school on empty stomachs, so the province provided all schools with canteens and funds to buy produce directly from poor local farmers and prepare free lunches for its fifteen-million pupils. It added monthly stipends for 1.7 million registered[1] poor students and focused on boosting their confidence in education as the best way to lift their families out of poverty. The education department also called on its best teachers and administrators for help. Zhang Yan, an outstanding principal in Zunyi City (pop. one-million), said, “I’ve focused my plan on coaching teachers in the poverty-stricken areas rather than giving lectures at rural schools.” By 2020, Guizhou had relocated two million poor people from mountainous areas considered uninhabitable into urban areas and enrolled their 130,000 children in 1,600 schools near their new homes. By year’s end, the province will have completed three hundred nurseries and junior high schools for a further fifty-thousand relocated children.

CHINA DREAMS OF Gini has funded improved basic facilities, simplified the recruitment process for poor students and created preferential university admission policies for poor students and, by 2020, the Education Ministry had rolled out the most promising pedagogic techniques nationwide, disadvantaged children were testing as well as Europe’s fifteen-year-olds, artificial intelligence was part of the national curriculum, and Britain was spending fifty-million dollars training its teachers in China and translating its textbooks.

[1] Their families are officially enrolled in the government’s anti-poverty campaign.

Though we happily compare heritable traits like height, good looks and athletic ability, we are reluctant to do the same with intelligence, some even claiming that IQ is irrelevant to life outcomes. Yet we boast about one percent of us, our Ashkenazi Jews who win forty percent of our Nobel Prizes. The Chinese have no such ambivalence. Since the dawn of time they have known that intelligence is heritable and do everything to nurture it. Only brilliant students can hope to marry into scholarly families and, every generation, cultural opposition to wedding unintelligent men eliminates their genomic inheritance from the national gene pool.

This process of elimination has been going on for so long that Ron Unz[1] found Chinese intelligence almost immune to most socio-economic factors. Healthy Swiss are fifty times richer and receive twice the schooling of poorly nourished rural Chinese (who have also carried a heavy disease burden for generations) yet Chinese IQs are consistently higher, “The reported Chinese PISA[2] scores are far above those of the United States and nearly every European country, many of which are almost totally urbanized and have incomes ten times that of CHINA DREAMS OF Gini. It is almost unimaginable that any non-East Asian population of rural villagers with annual incomes in the $1,000 range would have tested IQs very close to 100 [the median]. We would certainly expect Chinese numbers to rise further as the country continues to develop, but my point is that East Asian IQs seem to possess a uniquely high floor compared with those of any other population.

*98% of the bottom quartile and 90% of the top three quartiles.

[1] The East Asian Exception to Socio-Economic IQ Influences

RON UNZ • THE AMERICAN CONSERVATIVE • JULY 18, 2012 •

[2] Programme for International Student Assessment (PIS ) is a worldwide study by the Organisation for Economic Co-operation and Development (OECD) to evaluate educational systems by measuring 15-year-old school pupils’ scholastic performance on mathematics, science, and reading.

[1] The GINI coefficient, developed by Italian statistician and sociologist Corrado Gini measures income inequality. A lower number indicates greater equality.

  1. The CHINA DREAMS OF Gini coefficient, developed by Italian statistician and sociologist Corrado Gini, measures income inequality. A lower number indicates greater equality.

Mao’s Great Proletarian Cultural Revolution

 

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