Javier Hernandez and Quactrung Bui report in the New York Times:
China is still much poorer over all than the United States. But the Chinese have taken a commanding lead in that most intangible but valuable of economic indicators: optimism. The Chinese are now among the most optimistic people in the world — much more so than Americans and Europeans. What has changed? Eight hundred million people have risen out of poverty. That’s two and a half times the population of the United States. Economic inequality in China is the same as in the United StatesChina is still much poorer over all than the United States. But the Chinese have taken a commanding lead in that most intangible but valuable of economic indicators: optimism.In a country still haunted by the Cultural Revolution, where politics are tightly circumscribed by an authoritarian state, the Chinese are now among the most optimistic people in the world — much more so than Americans and Europeans, according to public opinion surveys.What has changed?Most of all, an economic expansion without precedent in modern history.Eight hundred million people have risen out of poverty. That’s two and a half times the population of the United States.
1.2 billion people1.0Not in poverty0.80.60.4In poverty0.2201519901995200020052010Source: The World Bank. People in poverty live at or below $1.90 a day.Not only are incomes drastically rising within families, but sons are outearning their fathers. That means expectations are rising, too, especially among China’s growing middle class.Life expectancy has also soared. Chinese men born in 2013 are expected to live more than seven years longer than those born in 1990; women are expected to live nearly 10 years longer.“It feels like there are no limits to how far you can go,” said Wu Haifeng, 37, a financial analyst who was born to a family of corn farmers in northern China and now earns more than $78,000 a year. “It feels like China will always be strong.”China used to make up much of the world’s poor. Now it makes up much of the world’s middle class.
There are risks, of course, and no guarantees that China’s rise will continue indefinitely.A prolonged economic slump could inflict major damage. And experts warn that China could fall into the middle-income trap — in which growth and earnings plateau — if it fails to address high corporate debt levels or doesn’t do more to encourage innovation. Demography is also a ticking bomb: China is racing to get rich before it gets old.Yet for now, the economic arc seems ever upward.Like the United States, China still has a yawning gap between the rich and the poor — and the poorest Chinese are far poorer, with nearly 500 million people, or about 40 percent of the population, living on less than $5.50 a day, according to the World Bank.But by some measures Chinese society has about the same level of inequality as the United States. Here are the world’s major countries ordered by inequality and income mobility.
FinlandMoremobileNorway20%How much a child’sincome is determinedby their parents’SwedenJapanChina40%UnitedStates60%South AfricaIndia80%circles scaledby populationMoreEqualEgypt60504030Level of inequality(Gini)Source: The World Bank, Fair Progress, Economic Mobility Across Generations Around the World; World Development IndicatorsToday, the economic output per capita in China is $12,000, compared with $3,500 a decade ago. The number is far higher in the United States, $53,000.Yet few analysts doubt where the bigger increases will come. Here’s how modern China’s per-capita G.D.P. growth compares so far:
United States$50k per capita G.D.P.$40kJapanSouth Korea$30k$20kChina$10k020406080100120140160Number of years since each country reached China’s per-capita G.D.P. in 1993In 2011 U.S. dollars. |Source: Maddison Project.China’s progress is especially remarkable given how the government has used social engineering to restrict where people live and how many children they have. Loosening those constraints could accelerate income growth.This is why many people now talk about “the Chinese Dream.”Xu Liya, 49, once tilled wheat fields in Zhejiang, a rural province along China’s east coast. Her family ate meat only once a week, and each night she crammed into a bedroom with seven relatives.Then she attended university on a scholarship and started a clothing store. Now she owns two cars and an apartment valued at more than $300,000. Her daughter attends college in Beijing.“Poverty and corruption have hurt average people in China for too long,” she said. “While today’s society isn’t perfect, poor people have the resources to compete with rich people, too.”An earlier version of a chart on economic inequality used an older estimate of inequality in China. Based on the most recent World Bank data, economic inequality in China is roughly the same as in the United States, not slightly less.
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