China's Wealth Disparity Erupts in Wukan Protests

Posted by: Dan Beucke on December 16, 2011 at 6:30 AM

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The Occupy Wall Street protests in the U.S. are a delayed reaction to a bursting property bubble, which led to a jobs crisis and rising anger over financial influence and wealth disparity. What’s happening right now In China — angry protesters seizing a village and forcing Communist officials to retreat — is a dramatic example of what happens when a similar toxic mix plays out in a totalitarian society.

The protests in Wukan, a coastal village in Guangdong province, began three months ago over land seizures. They exploded this week after party officials tried to seal off Wukan with riot police, setting up roadblocks, blocking fishing boats, and beating residents. On Wednesday the party was forced to back down, saying it would halt a controversial real estate project and investigate local officials. The images out of Wukan are a startling contrast to the usual way Chinese officials manage to snuff out any sign of public discord.

At the heart of the protests is a corrupt system in which local officials seize land, evict poor tenants, and sell it to rich developers to fund government operations. A Bloomberg article last October described this strange twist on the Communist Revolution:

Mao Zedong won the hearts of the masses by redistributing land from rich landlords to penniless peasants. Now, powerful local officials are snatching it back, sometimes violently, to make way for luxury apartment blocks, malls and sports complexes in a debt-fueled building binge. City governments rely on land sales for much of their revenue because they have few sources of income such as property taxes. They’re increasingly seeking to cash in on real estate prices that have risen 140 percent since 1998 by appropriating land and flipping it to developers for huge profits.

Market reforms that began under Deng Xiaoping in the late ’70s sparked spectacular economic growth — and widened the divisions between rich and poor, city dwellers and farmers. The share of income collected by the top 1 percent of China’s earners more than doubled between 1986 and 2003, to 5.87 percent, according to the incomes database of Facundo Alvaredo, Tony Atkinson, Thomas Piketty and Emmanuel Saez. (That was still lower than the share held at the time by their U.S. counterparts, 14.87 percent.) China ranked 53rd on the CIA’s list of countries with the most unequal incomes — lower than the U.S. (40) — based on 2007 data.

Land disputes and growing numbers of “mass incidents” (the Chinese term for any large public protest) aren’t the most spectacular manifestation of China’s class tensions. In two separate cases this year, sons of powerful officials were found guilty of running down peasants with their cars. One of the men was executed after admitting he stabbed to death a young woman whom he feared would seek payment for her injuries.

(Photographer: Peter Parks/AFP/Getty Images)

Reader Comments

ChinaMusings

December 17, 2011 9:05 AM

The question that arises here is how might the wealth discrepancy--or the increasing awareness of it--shape China's internal politics. Protests in places like Wukan could well give momentum to the agenda of China's New Maoists, men like Bo Xilai, who is making a "new left" case for his appointment to Standing Committee of the Politburo. See "Is Occupy Wall Street Preoccupying Beijing?," http://chinamusings.com/2011/11/10/is-occupy-wall-street-shaking-up-beijing-politics/ (originally published in the Christian Science Monitor).

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"The Wealth Debate" is a running discussion of wealth, poverty, the economy and income inequality in the U.S. and the world. It was started shortly after the Occupy Wall Street movement sparked a global protest about the fallout from the financial crisis and money in politics. You can reach the editors, Dan Beucke and Mark Gimein, by email, or follow BloombergNow on Twitter to keep up with posts.

Analyses or commentary in this blog are the views of the author and or commentators, and do not necessarily reflect the views of Bloomberg News.

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