China’s richest man, soft drinks magnate and Queen-snubber Zong Qinghou, doesn’t think inequality should be a priority for the Chinese government. Why doesn’t everyone just become wealthy?
“If everyone is wealthy, society will be harmonious, and more comfortable,” the 67 year old billionaire told reporters in Beijing.
“We don’t need to solve the problem of the rich-poor gap, we need to solve the problem of common prosperity.”
It’s unclear what Zong means by “common prosperity”, China’s nominal GDP for 2012 was over $8 trillion. Taken as a whole, China is pretty damn prosperous.
To achieve his goal of “common prosperity”, Zong said that the rich “should help everyone to become prosperous”. Fantastic! So he supports a progressive tax system designed to help tackle inequality and enable those at the bottom of society to succeed? Not so much.
He called for lower taxes to stimulate investment. “It’s best to encourage people to create wealth,” he said.
Of course! Because if there’s one thing the world’s second richest country needs, its more wealth. Obviously the wealthier a country is, the more equal (“commonly prosperous”) it is, right?
China’s Gini coefficient, a measure of inequality with 0 representing total equality and 1 representing total inequality, stood at 0.47 last year, according to government statistics. That would put it close to the US, which had an index figure of 0.56 in 2009, according to the World Bank.
The recession seems to have cemented the country’s income and wealth inequality, not reversed it. The top 10 percent earn a larger share of overall income than they have since the 1930s. The earnings of the top 1 percent took a knock during the recession, but have bounced back. In contrast, the average working family’s income has continued to decline through the anemic recovery.
The median annual household income—the point on the income scale at which half earn more and half earn less—fell in 18 states in 2011 from a year earlier after adjusting for inflation.
Of course the people who are really suffering due to rampant inequality are the poor unfortunate heiresses like Zong’s daughter Zong Fuli, who can’t find a boyfriend because she’s just too damned rich.
[Image credit: People’s Daily]