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iron rice bowl
What in the yellow peril?
Chan received his doctorate from Princeton University and was previously an adjunct researcher with the RAND Corporation. He completed his master’s degree at the London School of Economics and his bachelor’s degree at the University of Chicago. He was born and raised in Los Angeles.
Not as cool as my man becoming a China expert solely by epigenetic knowledge
What a stellar endorsement of character, with the board and funding orgs. 😬
I ran into a Chinese leftcom the other night and he was trying to get me to read a pamphlet by middle schoolers (a horse club, if anyone has had this happen to them please let me know as it was surreal)
But yeah he was talking about how China’s wages are falling, social security is on the verge of implosion, and he figured all this out when he flunked out of school and started going on wikipedia.
I wonder if he wasn’t even a fed and just some poor experiment left behind by an earlier era of psyops. They don’t even need that guy now
Sounds like someone has been skipping their Lenin classes 😂
They love writing negative fan fiction about China. lol.
So I was digging into this a bit last night and would love the perspective of some folks that know more about China.
One really interesting thing I read was that China’s Gini coefficient was like 0.465 in 2024 which is relatively high. It looks like from a redistributive perspective China is doing less than the most European welfare states. By that I mean it is less effective at redistributing income, not necessarily at providing public services.
The other related element was that apparently a significant portion of local government tax revenue was related to property taxes and that there is still a fairly low capital gains tax. The article I was looking at suggested that that was a big part of the urban/rural wealth gap. Basically that without national level taxes it’s hard for local governments to address the broader issues of inequality.
I hope that makes sense and that someone here can help me better understand how the Chinese look at this issue. I’m particularly curious about the capital gains and national level taxation issues as it looks a lot like elite capture when viewing it with limited context and expertise.
I mean here are some actual numbers to put things in perspective.
90% of families in the country own their home giving China one of the highest home ownership rates in the world. What’s more is that 80% of these homes are owned outright, without mortgages or any other leans. https://www.forbes.com/sites/wadeshepard/2016/03/30/how-people-in-china-afford-their-outrageously-expensive-homes
Student debt in China is virtually non-existent. https://www.forbes.com/sites/jlim/2016/08/29/why-china-doesnt-have-a-student-debt-problem/
Chinese household savings hit another record high in 2024 https://www.wsj.com/livecoverage/stock-market-today-dow-jones-bank-earnings-01-12-2024/card/chinese-household-savings-hit-another-record-high-xqyky00IsIe357rtJb4j
People in China enjoy high levels of social mobility https://www.nytimes.com/interactive/2018/11/18/world/asia/china-social-mobility.html
The typical Chinese adult is now richer than the typical European adult https://www.businessinsider.com/typical-chinese-adult-now-richer-than-europeans-wealth-report-finds-2022-9
Real wage (i.e. the wage adjusted for the prices you pay) has gone up 4x in the past 25 years, more than any other country. This is staggering considering it’s the most populous country on the planet. https://www.youtube.com/watch?v=Cw8SvK0E5dI
The real (inflation-adjusted) incomes of the poorest half of the Chinese population increased by more than four hundred percent from 1978 to 2015, while real incomes of the poorest half of the US population actually declined during the same time period. https://www.nber.org/system/files/working_papers/w23119/w23119.pdf
From 1978 to 2000, the number of people in China living on under $1/day fell by 300 million, reversing a global trend of rising poverty that had lasted half a century (i.e. if China were excluded, the world’s total poverty population would have risen) https://www.semanticscholar.org/paper/China’s-Economic-Growth-and-Poverty-Reduction-Angang-Linlin/c883fc7496aa1b920b05dc2546b880f54b9c77a4
From 2010 to 2019 (the most recent period for which uninterrupted data is available), the income of the poorest 20% in China increased even as a share of total income. https://data.worldbank.org/indicator/SI.DST.FRST.20?end=2019&%3Blocations=CN&%3Bstart=2008
By the end of 2020, extreme poverty, defined as living on under a threshold of around $2 per day, had been eliminated in China. According to the World Bank, the Chinese government had spent $700 billion on poverty alleviation since 2014. https://www.nytimes.com/2020/12/31/world/asia/china-poverty-xi-jinping.html
Over the past 40 years, the number of people in China with incomes below $1.90 per day – the International Poverty Line as defined by the World Bank to track global extreme poverty– has fallen by close to 800 million. With this, China has contributed close to three-quarters of the global reduction in the number of people living in extreme poverty. https://www.worldbank.org/en/news/press-release/2022/04/01/lifting-800-million-people-out-of-poverty-new-report-looks-at-lessons-from-china-s-experience
That’s useful and when you take those data points maybe there’s something more fundamental I’m missing based on the way I’m looking at the issue. I come at these issues with a western economics lens and it’s easy to imagine I’m missing something about the way they structure their economy and handle income redistribution more broadly.
It sounds like what we’ve seen is a massive PPP improvement across the board, and specifically for the bottom 20%. That’s obviously a good sign that they’re moving more towards the “olive shaped” income distribution they’re targeting.
Do you know a good source for details about the way China handles the federal vs provincial vs local funding issues? I’m having trouble trying to find good english language sources and I’d like to learn more about how they handle taxes and grants and what that looks like mechanically.
This world bank paper provides a detailed breakdown of standard expenditures and revenue calculations https://documents1.worldbank.org/curated/en/891221468236962204/pdf/415790CN.pdf
That said, I think the key part isn’t in taxation actually but the fact that the state holds the commanding heights of the economy. https://www.piie.com/research/piie-charts/2024/chinas-private-sector-has-lost-ground-state-sector-has-gained-share-among
The key difference is that in the west the purpose of work is to create profit for people who own capital. Any social value produced as the result of work is strictly incidental. Hence, public sector relies on taxation to provide the necessities of life. The dynamic in China is fundamentally different because it is a planned economy. State owned enterprises are the main drivers of development, and private sector exists within the framework of five year plans. The party also controls the golden share of all the major private companies having members on the board. And that’s the main factor responsible for ensuring that work by and large has a productive quality to it. People in a socialist state work in their own interest, they build infrastructure, develop technology, grow food, etc., for their own benefit. Profit of the capital owning class is not the primary driver of economic development.
Thank you for taking the time to patiently explain so much of this to me. I’ve got a lot to read and think about!
O7
I found a YouTube link in your comment. Here are links to the same video on alternative frontends that protect your privacy:
