NEW DELHI: It may sound improbable; but China has brought one-time bête noire CPM and Asian Development Bank (ADB) on the same plank. Both, after hailing China’s growth story for decades, seem to have suddenly realised that “inequality is rising” in China.
The CPM, after hailing China as the ultimate growth story for decades, had committed a political sacrilege recently by saying that China is rife with growing inequalities, unemployment, regional imbalances and above all corruption. Now the ADB has said the same. It has pointed out the “rising inequality” in China in its latest Asian Development Outlook (ADO) 2012 which, according to it, is casting a shadow over the success story.
Even while maintaining that Asia as a whole and China in particular recovered quickly from the last financial crisis and continues to post healthy growth figures, the ADO says that the situation in China is worrisome.
“New figures from ADO, 2012 show that worrying inequality has risen in the Peoples Republic of China...,” it says. The ADB has used the Gini coefficient to quantify the inequality gap, and says that the higher the figure, the bigger the problem.
In its report, the ADB said that the Gini coefficient in China had increased to 43 in 2010, from 32 in the early 1990s. Unequal access to education, health and other public services contributes greatly to growing inequalities, further hindering opportunities for the poor to raise their living standards. “Inequality leads to a vicious circle, with unequal opportunities creating income disparities, that in turn lead to dramatic differences in future opportunities for families,” ADB Chief Economist Changyong Rhee has said.
ADB has also warned of a possibility of a split in national development between urban and rural areas, increasing internal instability and tensions. The CPM’s dramatic change in perception had appeared in the latest ideological document prepared to tune the party’s ideological line in sync with the changing global and Indian context. The ideological resolution -- reworked for the first time since 1992 -- was placed in the party congress to be held early this month. It had also said that what is happening in China are “trends alien to Socialism”.
Though the CPM has stopped short of calling China a “Capitalist country”, the party ideological document had said that there is a huge income gap between rich and poor. “China has more billionaires today than any other country other than the United States of America,” the CPM document said.