BEIJING â€" Search the word Gini, or “jini,†for Gini coefficient, the well-known measure of income inequality, on China’s biggest microblogging site and the first result today was for Lamborghini, the Italian luxury sports car (in Chinese, the two words share a similar sound in the last part of the car’s name.)
That’s very ironic because the Gini coefficient measures income inequality and the Lamborghini, which can set a buyer back 300,000 U.S. dollars, is a not uncommon sight on the streets of big Chinese cities, an object of resentment among ordinary people who view it as a symbol of how a small number of people are amassing tremendous wealth as most struggle with low incomes, low bank deposit rates, high property prices and persistent inflation.
In other words, income inequality in China is politically sensitive.
(he Gini index, of course, is a measure of household income inequality; zero represents perfect income equality and 1 perfect inequality, a situation where one person would own all the wealth, as the World Bank explains.)
So last Friday, when the government announced China’s Gini coefficient figures for the first time in over a decade, there was excitement - and quite a bit of scorn, expressed online and in media reports as well as private conversations. Why
According to the figures, China today is actually more equal than in 2003, the National Bureau of Statistics said.
From 2003, the Gini coefficient did indeed rise, the bureau said, ! from 0.479 to a high in 2008 of 0.491. But by 2012 the figure had dropped to 0.474, meaning China is a more equal society today than a decade ago - despite all those Lamborghinis on the street.
At a news conference, Ma Jiantang, the bureau director, called the rate nevertheless “relatively high,†Xinhua reported. “China must accelerate its income distribution reform to narrow the rich-poor gap,†Xinhua said.
Yet the government’s “effective measures†to “bring benefits for its people†after the gobal financial crisis began in 2008 had brought down the measure, it quoted Mr. Ma as saying.
To compare with the United States: in 2011, the Gini coefficient there was also high, at 0.477, according to the U.S. Census Bureau
Xinhua quoted the United Nations as putting the “warning level†on the rich-poor gap at 0.4.
Yet in China this weekend, few believed the new figures.
p>Here are two lively reactions from microblogs, from a well-known journalist and a well-known economist who together have over six million followers:“Please choose one: 1. Really, thank you Fatherland; 2. That’s a myth; 3. Hard to say, but hurry up and increase my salary,†Shi Shusi, a well-known journalist and social affairs commentator and an editor at the Worker’s Daily newspaper, mocked on his Sina Weibo account to nearly 875,000 followers.
Xu Xiaonian, a professor of finance and economics at the China Europe International Business School, wrote on his Weibo account (5.5 million followers): “A journalist rang to ask me to comment on today’s macroeconomic figures. I’d have to be crazy to truthfully comment on false figures. That Gini coefficient, to use the words of Zheng Yuanjie,†a well-known children’s storywriter, “‘no-one would even dare to write a fairytale like that.’â€
A different report, in December, by researchers at the Southwestern University of Finance and Economics in the city of Chengdu, put China’s Gini at 0.61 for 2010.
While people are by and large glad to see the government once again measuring the figure after a decade-long hiatus (which Mr. Ma explained last year was due to the fact that the government didn’t actually know what people in the cities were earning, as I explored in a Letter from China column,) a key problem facing the government is the scale of people’s “hidden income,†estimated by the Beijing-based economist Wang Xiaolu several years ago to be about 9.3 trillion renminbi (nearly 1.5 trillion U.S. dollars.)
