HomeEconomicLooking ahead to 2023: Has the epidemic widened China's "three major differences"?

Looking ahead to 2023: Has the epidemic widened China’s “three major differences”?

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Yuan Dynasty poet Zhang Yanghao said in a poem that “prosperity makes the people suffer; death makes the people suffer.” This may be a general portrayal of human society. People at the bottom of society always have the lowest “sense of gain”. The annual report released by the international charity organization Oxfam on the 16th shows that in the past two years, the richest 1% of the world’s population has gained nearly twice as much wealth as the remaining 99%. Since the outbreak of the epidemic, the income of low-income earners in Western countries has fallen even more due to loose monetary policies. Real estate and stocks in South Korea have appreciated sharply. The average net worth of the richest 20% of the top 20% in 2021 is 1.28 billion won, which is 125.5 times that of the poorest 20% and 99.8 times in 2017. From March 2020 to October 2021, the total wealth of US billionaires increased by $2.07 trillion, an increase of nearly 70.2%. As of the third quarter of 2021, the total assets of the top 1% of households in the United States reached 43.94 trillion U.S. dollars, accounting for 32.1% of total social wealth, while the bottom 50% of household wealth accounted for only 2.5%. On the contrary, during the epidemic period, China put an end to “flood irrigation”, but the successive epidemics and foot bans have also had a great impact on the catering and tourism industries. Has the epidemic further deepened the three major differences?

Traditionally, the three major differences are the difference between workers and peasants, the difference between urban and rural areas, and the difference between mental labor and physical labor. After China established a socialist market economy in 1992, the three major differences among classic Marxist writers gradually evolved into “class differences”, “urban-rural differences” and “east-west differences”. The report of the 20th National Congress pointed out that “From now on, the central task of the Communist Party of China is to unite and lead the people of all ethnic groups in the country to build a powerful modern socialist country” and pointed out that “Chinese-style modernization is the modernization of common prosperity for all people.” Since the establishment of the socialist market economy, what changes have the three major differences experienced? What changes have occurred in the epidemic situation in the past three years?

1. The difference between urban and rural areas: keep it below 3 times

In China’s traditional dual economy, the long-term implementation of agricultural subsidies and industrial policies during the planned economy period has caused a large difference between urban and rural areas. Reform and opening up started with the rural household contract responsibility system, and the gap between urban and rural areas began to narrow. The per capita disposable income of urban residents is higher than that of rural residents, as shown in Figure 1. The decline in the first stage was 2.6 times in 1978 at the beginning of the reform and opening up, and dropped to 1.82 times in 1983. The second stage 1984-1994 rises. Undoubtedly, the cities and towns with an export-oriented economy will benefit most from the opening up of the coastal areas and along the river, especially after joining the WTO. In the third stage, it declined in the short term, and increased rapidly after the establishment of the socialist market economy in 1992, reaching 2.9 times in 1994. The fourth stage rises from 1997-2007. In 2001, the first year of the Tenth Five-Year Plan, it was 2.8 times, and in 2006, the first year of the Eleventh Five-Year Plan, it was 3.1 times. Phase V 2008-present decline. After the subprime mortgage crisis in 2008, the gap between urban and rural areas began to decline again. In 2010, the last year of the Eleventh Five-Year Plan, it was 2.9 times, and in 2015, the last year of the Twelfth Five-Year Plan, it was 2.7 times. It was 2.6 times in 2019 before the epidemic, and 2.6 times and 2.5 times in 2020 and 2021 during the epidemic.

Data source: National Bureau of Statistics.

The difference between urban and rural low-income groups is slightly higher than average. It can be seen from Figure 2 that according to the five grades of household income of the National Bureau of Statistics, in the first year of the Eleventh Five-Year Plan, in 2006, the per capita disposable income of urban households in the low-income group was three times that of rural residents in the low-income group, and in the last year of the Twelfth Five-Year Plan. In 2010, it was 3.2 times, in 2015, the first year of the Thirteenth Five-Year Plan, it was 3.96 times, and the median ratio was 2.8 times. It was 3.64 times in 2019 before the epidemic, 3.3 times in 2020, the last year of the 13th Five-Year Plan since the epidemic, and the median ratio was 2.7 times. In 2021, the first year of the 14th Five-Year Plan, it was 3.4 times, and the median ratio was 2.57 times. We guess that the relative income of low-income groups in rural areas has failed to catch up with low-income groups in urban areas, which may be related to the insufficient improvement of human capital of low-income groups in rural areas, the loss of high-quality rural labor force, the difference in financial resources and social security between urban and rural governments, and the overall appreciation of the RMB exchange rate to depress the prices of agricultural products. related.

The rich are the same in town and country. The per capita disposable income gap between urban and rural households in the high-income group is small, as shown in Figure 2. The income gap between the urban rich and the rural rich has always been maintained at about 2 times. The income gap between urban and rural areas is even greater, especially in rural areas.

Data source: National Bureau of Statistics.

2. Differences between East and West: L-shaped decline after the financial crisis

After the reform and opening up, China’s economy and people’s income have taken off. It can be seen from Table 1 that in 1992, the second year of the Eighth Five-Year Plan, the top five cities with the richest per capita GDP in Shanghai, Beijing, Tianjin, Guangdong, and Liaoning were 8 times that of the bottom five Guizhou, 4.7 times in Gansu, 3.1 times in Anhui, and 2.5 times in Henan. , Tibet 2.5 times. In 1996, the first year of the 95th Five-Year Plan, the gap further widened. The wealthiest cities in Shanghai, Beijing, Tianjin, Zhejiang, and Guangdong were 10.2 times that of Guizhou, 5.4 times that of Tibet, 4 times that of Gansu, 2.8 times that of Shaanxi, and 2.7 times that of Jiangxi. . In 2001, the first year of the fifteenth year, the gap still remained relatively high. The wealthiest cities in Shanghai, Beijing, Tianjin, Zhejiang, and Guangdong are 10.7 times that of Guizhou, 6.3 times that of Gansu, 3.5 times that of Guangxi, 2.9 times that of Yunnan, and 2.7 times that of Jiangxi. In 2006, the first year of the Eleventh Five-Year Plan, the wealthiest cities in Shanghai, Beijing, Tianjin, Zhejiang, and Jiangsu were 9 times (declining), Gansu, 6.2 times, Yunnan 3.6 times, Guangxi 3.2 times, and Tibet 2.8 times the bottom five respectively.

In 2010, the last year of the Eleventh Five-Year Plan, the wealthiest cities in Shanghai, Beijing, Tianjin, Jiangsu, and Zhejiang were 6.2 times (significantly lowered), Gansu, 5.1 times, Yunnan 3.2 times, Tibet 23.1 times, and Guangxi 2.8 times, respectively. , the overall decline. In 2015, the last year of the Twelfth Five-Year Plan, the wealthiest cities in Beijing, Shanghai, Jiangsu, Zhejiang, and Tianjin were 4.5 times that of Gansu, 3.7 times that of Guizhou, 2.9 times that of Heilongjiang, 2.5 times that of Guangxi, and 2.2 times that of Yunnan. decline.

In the first year of the epidemic, that is, in 2020, the last year of the 13th Five-Year Plan, the wealthiest cities in Beijing, Shanghai, Jiangsu, Fujian, and Tianjin were 4.6 times that of Gansu, 3.6 times that of Heilongjiang, 2.7 times that of Guangxi, 2.3 times that of Guizhou, and 2.1 times that of Hebei. times. In the second year of the epidemic, the wealthiest cities in Beijing, Shanghai, Jiangsu, Fujian, and Tianjin were 4.5 times that of the bottom five Gansu, 3.7 times that of Liaoning, 2.8 times that of Heilongjiang, 2.3 times that of Henan, and 2.1 times that of Inner Mongolia.

With “development is the last word” deeply rooted in the hearts of the people and the establishment of the socialist market economy, the enthusiasm of the provinces to develop the economy has been greatly enhanced. The ratio of the lowest-income provinces to the national average experienced a rapid decline and began to rise. In 1992, Guizhou with the lowest per capita income was 43.6% of the country. In 1996, it dropped rapidly to 9%. In 2001, it rose to 15.8%. 50.6%. Since the outbreak, the lowest GDP per capita in Gansu in 2020 is 50.1% of the national average, and 50.6% in 2021.

Table 1 The gap between China’s east and west since the Eighth Five-Year Plan (unit: multiple)

Note: Rich refers to provinces with large per capita GDP, and poor refers to provinces with low per capita GDP.

Data source: National Bureau of Statistics

3. The difference between the rich and the poor: much higher than the difference between the east and the west and the difference between urban and rural areas

China’s per capita income at all levels has taken the express train of economic take-off, but internal class divisions have also become more serious, and the gap between the rich and the poor is far greater than the gap between the east and the west and the gap between urban and rural areas.

1. The national high-income group is 10 times that of the low-income group. In 2016, according to the national quintiles of income, the per capita disposable income of the low-income group was 5,529 yuan, and the per capita disposable income of the high-income group was 59,259 yuan, up to 10.7 times. In the first year of the epidemic and 2020, the last year of the 13th Five-Year Plan, the per capita disposable income of the low-income group was 7,869 yuan, and the per capita disposable income of the high-income group was 80,294 yuan, which is still as high as 10 times. In the second year of the epidemic and 2021, the first year of the 14th Five-Year Plan, the per capita disposable income of the low-income group was 8,333 yuan, and the per capita disposable income of the high-income group was 85,836 yuan, up to 10.3 times.

2. The gap between rich and poor in rural areas is more than 7 times higher than that in cities, and it shows an overall expanding trend. In 2006, the average per capita net income of the 5 grades of income of rural residents was 7.2 times that of low-income households in high-income households. 7.5 times in 2010 and 8.4 times in 2015. Since the outbreak, it will be 8.2 times in 2020 and 8.8 times in 2021.

3. The gap between the rich and the poor within the city has remained at more than 5 times, and has slightly expanded since the epidemic. As shown in Figure 2, the income of residents in 2001 was divided into seven categories: minimum income households, low income households, lower middle income households, middle income households, upper middle income households, high income households, and highest income households. In the first year of the fifteenth year, in 2001, the average per capita disposable income of the 10% of high-income households was 5.4 times that of the 10% of the lowest-income households. In 2006, the 10% of the highest-income households were 8.96 times that of the 10% of the lowest-income households, 8.65 times in 2010, and 5.3 times in 2015 (starting to adjust to five equal parts in 2015, 20% each, low-income group, lower middle income group, middle income group, upper middle income group, high income group). Since the outbreak, it will be 6.2 times in 2020 and 6.1 times in 2021.

4. The disparities within the wealthiest municipalities continue to widen. In Shanghai, the wealthiest city in 1991, the first year of the Eighth Five-Year Plan, the highest income of urban residents was 2.7 times that of the lowest income. In 1996, the first year of the Ninth Five-Year Plan, it rose to 3.9 times, in 2001, the first year of the Tenth Five-Year Plan, it was 5.02 times, in 2006, the first year of the Eleventh Five-Year Plan, it was 4.8 times, in 2011 during the Twelfth Five-Year Plan, it was 4.07 times, and in 2016 during the Thirteenth Five-Year Plan, it was 4.26 times . The situation in Beijing is similar to that in Shanghai. The basic situation of 5,000 urban households (by income level) in 2010 was 3.9 times that of the 20% high-income households compared to the 20% low-income households. Based on the basic situation of 3,000 rural households, the per capita net income of the 20% high-income households is 4.9 times that of the 20% low-income households. According to the per capita disposable income of residents in Beijing in 2015, 20% of high-income households were 5.43 times that of 20% of low-income households. Since the outbreak, it will be 5.75 times in 2020 and 5.8 times in 2021.

5. The richest province has a larger disparity than the wealthiest municipality, but it has declined since the outbreak. The ratio of disposable income between high-income households and low-income urban households in Guangdong was 5.7 times in 1995, 8 times in 2000, 9.6 times in 2005, 9.5 times in 2009, and 9.2 times in 2010. The net income ratio of high-income and low-income rural residents in Guangdong was 4.7 times in 1995, 4.2 times in 2000, 5.4 times in 2005, 5.3 times in 2009, and 5.4 times in 2010. In 2015, the proportion of high-income households and low-income households in the province was 6.96. Since the epidemic, the ratio of disposable income between high-income households and low-income households in Guangdong’s urban areas has declined instead, 7.36 in 2020 and 6.9 in 2021. In 2015, the disposable income of urban residents in Fujian was 4.86 times that of high-income households and 5.39 times that of rural households. . Since the outbreak, the disposable income of urban residents in Fujian in 2020 is 6.25 times that of high-income households and 5.8 times that of low-income households in rural areas. 5.6 times in 2021, 7.5 times for rural residents. In Jiangsu, the proportion of urban high-income and low-income households in 2015 was 5.57, and the proportion of rural residents was 6.29. In 2019, the proportion of urban residents was 6.9 times, and that of rural residents was 7 times. Since the outbreak, in 2020, the proportion of urban residents in Jiangsu will be 6.5 times, and that of rural residents will be 5.4 times. In 2021, the “Opinions of the Central Committee of the Communist Party of China and the State Council on Supporting Zhejiang’s High-quality Development and Construction of a Common Prosperity Demonstration Zone” was issued. The “Opinions” clearly stated that by 2025, Zhejiang Province will make significant and substantial progress in promoting high-quality development and building a common prosperity demonstration zone. Currently, the Zhejiang Statistical Yearbook lacks data on income inequality within Zhejiang Province.

6. The gap between the most backward provinces is also relatively large, and has continued to widen since the outbreak. Guizhou is the worst. In 2015, the per capita disposable income of the 20% of urban residents with high income was 5.2 times the per capita disposable income of the 20% of urban residents with low income. Since the epidemic, 2020 is 8.3. The ratio in rural areas was 6.26 in 2015 and 5.09 in 2020. The proportion of per capita disposable income of urban residents in Gansu’s income quintile group was 4.6 times in 2015, and the proportion in rural areas was 7.99 times in 2015. Since the outbreak, the proportion of urban residents in 2020 is 5.9 times that of rural residents and 3.6 times.

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