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Just not fair

Official Gini number is released at last – but the response is sceptical

Print

01 Feb 2013
Week in China

Born in 1884, Corrado Gini led a distinguished career as a statistician, even if his politics deviated away from the mean to the extreme end of the spectrum. Published in 1927, Gini’s The Scientific Basis of Fascism was regarded as a weighty contribution to right wing thought. Fortunately the Italian’s work in statistics has long outlived his political insights, with his Gini coefficient still used as a measurement of income disparity.

Even China’s National Statistics Bureau (NBS) recognises Gini’s longevity, it seems, after publishing 10 years worth of coefficient data last month going all the way back to 2003.

This was the first official release in 12 years, reports the Associated Press, and follows criticism that the authorities have been holding back on publishing the numbers because of growing tensions about the wealth gap across Chinese society.

Not so, says the NBS, which has blamed the delay on the challenges of securing data about the incomes of China’s rich (a complaint shared by the tax authorities, no doubt).

To rectify this, the NBS conducted a national survey last year to collect enough information for a new calculation. The end result was published in the middle of last month: a Gini coefficient of 0.474, a score similar to that of Argentina, and above the 0.4 level warning level that the United Nations says indicates a large income gap.


10% of Chinese households hold about 80% of the wealth

A Gini coefficient of 1 suggests a society where one individual controls the wealth, while a society with perfect equality has a score of zero.

China’s score does suggest a high level of inequality (although it’s not dissimilar to the United States, Beijing might point out). State media also highlighted that the NBS data suggests the gap peaked at 0.491 in 2008 and has declined every year since. But the findings go against the widely held belief that the gap between rich and poor has been growing and some commentators have challenged the latest numbers as fiction.

“A journalist rang to ask me to comment on today’s macroeconomic figures. I’d have to be crazy to truthfully comment on false figures… to use the words of Zheng Yuanjie [a popular children’s story writer], no one would even dare to write a fairytale like that,” wrote Xu Xiaonian, a professor at the China Europe International Business School, on his weibo account.

In the long absence of official Gini data, others have been coming up with their own figures. Most of these Gini scores have been higher than the official number released last month. One such study, published in 2010 by Southwestern University of Finance and Economics in Chengdu, came out with a score of 0.61. “10% of Chinese households hold about 80% of the wealth,” Zhu Lijia at the China National School of Administration, told China Times. “Just from this, the Gini coefficient of 0.61 is more credible.”

The official numbers are roughly in line with figures released early last year by disgraced politician Bo Xilai, who revealed a 0.46 rating but declined to go into further detail. But putting aside whether the data is accurate, what’s more notable is that it was released at all. The announcement fuels speculation that the new leadership will push harder on policies to tackle inequality and indeed comments made by Ma Jiantong, director of the NBS, recognised public dissatisfaction over the issue.

“On the one hand, we need to make the cake bigger, while on the other, we need to do a better job of sharing it,” Ma noted.

The sceptics say that redistribution will require reforms that collide with the interests of the richest members of society, many of whom are members of the Communist Party. “People with vested interests won’t give up the benefits, so the government must adopt great political wisdom and courage to pursue the problem,” agreed Peng Xizhe of Fudan University in Shanghai, in an interview with the Associated Press.

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