The Nation of Growth

From Growth spreads inland (subscriber-only)

China is indeed getting more unequal as it develops, and public order is a genuine problem. But these ought to be seen as growing pains—transitional and, with luck, surmountable. Two aspects of that are a product of the extraordinary level of mobility that the Chinese workforce has exhibited over the past two decades—the more remarkable since government policy has often attempted to restrict people's freedom to move. One kind has been from interior to coast, so that the privileged growth seen there is spreading its benefits more widely than might at first appear. A second kind, visible across the whole country, has been what may rank as the most rapid rate of urbanisation ever recorded. In the past 25 years, according to admittedly highly uncertain UN figures, the percentage of Chinese living in cities has roughly doubled, to more than 40%. In 19th-century America, to cite another continent-sized country then in the throes of its own radical transformation, it took twice as long, 50 years, to accomplish the same result...

If the standard of living of the have-nots is improving in absolute terms—as is broadly the case in China—rising inequality may be easier to stomach than in a society where the poor are getting poorer. Figures show that incomes are still rising in rural China, even if they are rising much faster in the cities. More important, perhaps, is that in a China of greatly increasing social and geographical mobility people can have real hope for their children's prospects. And China still does not look that bad in international terms. Its Gini coefficient, a measure of how unequally income is distributed, shows it to be about as "equal" as America (and more so than Hong Kong)—though again the figures are questionable and may, some say, understate a worsening problem...

China is for the foreseeable future going to be the world's lowest-cost manufacturer of most household items, despite growing competition from Vietnam and India. So the process of allowing its hundreds of millions—deprived of material comforts by the insanities of Maoism—to catch up must in the end guarantee a healthy home market.

Of course even if China's stats for the Gini coefficient are comparable to the US's, there are plenty of people who are going to say that's a problem, because they believe in equality more than economic competition. Anyway, this suggests that (apart from religion, obviously) the Chinese Communist Party and the US Republican Party have something in common.