China’s Growth Pushed Up by the Grassroots – John Garnaut

From The Sydney Morning Herald:

The ageing cadres of revolutionary China are not happy that their country has progressed from being one of the worlds most egalitarian nations to one of the least, in just one generation.

Income inequality in Communist China now outstrips that in libertarian America and kleptocratic Russia. The rich-poor gap is worse only in Brazil and Argentina, according to World Bank estimates.

Judging by the renewed egalitarian rhetoric of its leaders, the contrast between China’s gaudy urban billionaires and its struggling rural poor is no longer just a political embarrassment. It is a problem of regime survival. President Hu Jintao and the Prime Minister, Wen Jiabao, have responded by banning rapacious local government taxes in rural areas and opening their wallets for huge spending on infrastructure, health and education. But even in this country of impossible ideological contradictions there is one solution they have not been talking about: democracy. [Full Text]

See also Grassroots Democracy and Income Distribution: Evidence from Village Election in China by Shen Yan and Yao Yang.

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