A Tidal Wave Of Discontent Threatens China -- A Commentary

From Times Online:

The most famous Chinese dissident predicts the Government will be trapped between the angry poor and the powerful rich

The whole world is suffering from an economic crisis. Some in the West, like a desperate drowning man clutching at a straw, have said the Chinese Government has a lot of money, let us beg them to save us from the crisis. But they do not realise that the Government in Beijing does not know how to save itself.

China has a $2 trillion foreign currency reserve but it also suffers from a huge disparity between the rich and poor: while 0.4 per cent of the people hold 70 per cent of the wealth of the country, a fifth of the population - more than 300 million Chinese - have daily incomes of less than one dollar. This extreme concentration of wealth is a serious problem for the Chinese Government and threatens its grip on power.

First, it means that there are too few consumers to sustain a domestic market. So “the workshop of the world” is particularly reliant on the fortunes of the world economy. The Chinese Government announced yesterday that exports had fallen at their fastest rate in a decade, declining by 2.8 per cent in December, on top of a 2.2 per cent year-on-year fall in November. China's exporters are collapsing, pulling down other businesses with them. The Government claims that unemployment is running at 4 per cent in urban areas; but the official figures cannot be believed. According to some serious statisticians, the unemployment rate may have already passed 20 per cent. This makes the severity of the economic crisis in China much sharper than in the US and Europe.

Read more ....

My Comment: The disparity between the rich and the poor in China is incredible. In the past, the rich were always reluctant to show their wealth. They dressed like everyone else, were humble when they were in public, and they never flashed. It was only when they were outside of the country did they dress like us, wore real Rolex watches, and flashed their "Black" Bank Of Macao Mastercards with $500,000 U.S. limits .... and that was in 1989.

The situation started to change 10 years ago, where flashing one's wealth started to become normal. And while China now has a growing middle class, much of the wealth is still possessed through the families who have a history of being loyal communists and supporters of the central regime in Beijing.

Can this change very quickly .... I am skeptical of that of that idea and the points that are made in the above Times commentary. The Chinese Red Army is still very loyal to Beijing. The media is controlled by the government, and access to outside information is still very tightly monitored. More importantly .... most people in China do feel better off when they compare their lives to their parents and grand parents.

In short ..... the people will be resentful and unhappy .... but they will keep the peace.