ECON 455 Lecture 23 Social threats

ECON 455 Lecture 23 - Econ455 Economic Development in China Lecture 23 April 9 Social threats Sandra Poncet Lorch Hall room 207 Email

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1 1 Econ455: Economic Development in China Lecture 23: April 9 Social threats Sandra Poncet Lorch Hall, room 207 Email: [email protected] Office Hours: Mondays 16:30 12 2 Introduction Multiplication of protest movements (87,000 “public order disturbances” in 2005) is at odds with remarkable economic performance and decision by the CP to build a “socialist harmonious society” Growing concern that localized events may evolve into a widespread social crisis So it is crucial to identify the motives behind the unrest: derive from dissatisfaction over the impact of economic reforms and market based modernization amplified by widespread enterprise and government corruption and malfeasance So the central government is to tackle those 2 dimensions if it is to secure the sustainability of the reform process
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2 3 Lecture Outline Introduction I China’s Increase in Inequality A Inequality in China: level, evolution and dimensions B Growing number of losers II Social unrest in China A Stylized facts B Economic analysis of Chinese social unrest C Corruption and malfeasance as amplifiers III Responses by central authorities A ”New socialist countryside” B Property law C Proper incentives in terms of environmental protection Conclusion 4 I China’s Increase in Inequality A Inequality in China: level, evolution and dimensions Behind the increase in average income or HDI: increase of inequality explosion of number of losers
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3 5 Increase of inequality and end of the decrease in poverty Since 1999: increase in poverty and inequality parallel to growth Close to 10% of Chinese population live with less than 1$ a day 6 Comparison of the Gini Coefficients of Various Countries in 2000 UNDP
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4 7 Source: CHINA PROMOTING GROWTH WITH EQUITY Country Economic Memorandum, 2003 I China’s Increase in Inequality A Inequality in China: level, evolution and dimensions 8 B Growing number of losers 1 Within Rural areas: 2/3 of China’s population Decrease in absolute income in 2003 for 280 millions of farmers due to the rise in production and living costs due to multiplication of illegal fees Surplus of 170 million people (criteria: 10 mus (0.7 ha)) rarefied land: *desertification *pollution (190 millions use contaminated water) *expropriation: 70 millions lost their land since 1990. In 2004: 80 000 illegal grabs by corrupted official (derisory compensation (800 y/mu)) impediments to migrate although possibly only prospects (because of no guarantee to keep the land)
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5 9 HEALTH Undernourishment (11%) Aid scandal: contaminated blood in Henan No redistributive health system between cities and rural areas 1 Within Rural areas: 2/3 of China’s population 10 excessively high schooling fees in the poor provinces induce high drop outs (especially for girls) Menaces sur le miracle chinois EDUCATION Tragedy of the privatization of the educational system
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This note was uploaded on 03/07/2008 for the course ECON 455 taught by Professor Poncetsandra during the Winter '06 term at University of Michigan.

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ECON 455 Lecture 23 - Econ455 Economic Development in China Lecture 23 April 9 Social threats Sandra Poncet Lorch Hall room 207 Email

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