China and Wealth Disparity: the inevitable?

Abstract

China’s rise to economic power has captured the imagination of many. The world watches in awe as never before a country of this magnitude progress so much within a span of 40
years. However, the rapid development seems to be built on a fragile platform whereby the export-driven model causes its economy to be extremely vulnerable to any unfavorable
contraction of the major importers. Such reality induces the Chinese government to refocus their intention on fostering a healthy domestic consumption in forming a solid,
sustainable platform for long-term development. This strategic move requires a more equitable income distribution amongst different social classes in order to guarantee a
sufficiently strong demand for various goods produced by the local businesses. The underlying rationale bases on an economics principle of which consumers will spend less on
commodity goods when their income levels heightened. Therefore the economy with high concentration of wealth in a small group of people will not create as much demand for the
commodity products, which currently present a large junk of China outputs, as does the one with lower disparity. The research paper concludes that policies like restructuring
of the tax system and increasing of government spending on social aid is a good start but there will be people who fall through the cracks as long as corruption remains rampant.
On the other hand, an emphasis on providing compulsory quality education for the people and restructuring of the workforce will give the people a better quality of life and
ultimately reduce the wealth disparity.