China Looks to Share the Wealth

China Looks to Share the Wealth

CHINESE Premier Wen Jiabao wants to increase welfare spending so that many more of the country's people enjoy the benefits of economic growth.

On Friday, he briefed the National People's Congress on a plan to improve education, provide for the rural poor while ensuring affordable urban housing and increase social security, including a 10 per cent increase in old age pensions. Mr Wen's proposals are understandable and overdue, especially his proposal to deal with the discrepancy in urban and rural living standards. Per capita income in the country is less than one-third of the money made by city folk but peasants who go to work in town have limited access to health and welfare services there. And as China's extraordinary industrialisation continues, the peasants and factory workers who compare their living standards against well-connected entrepreneurs and their pals in the party do not like what they see. Yet while Mr Wen is wise to want to expand services for ordinary people, his plan has a fatal flaw. In a one-party state where the political elite does not have to answer to the people at the polls, administrative inefficiency is inevitable and corruption is a constant.

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The upper echelon of the Communist Party understand the damage done by the cupidity of many of their comrades and regularly make examples of officials who get too greedy. In January, a former supreme court judge was jailed for life for corruption. In August last year, the head of the state-controlled company that owns Beijing airport was executed for accepting bribes. But in a political culture where patronage and party connections shape decisions, the rule of law is easily undermined, especially in the country, where party bosses can be a law unto themselves and look upon public service as an opportunity for private profit, enriching themselves by developing land seized from peasants. A large part of the problem has less to do with gangsters in government than with structural flaws in the way administrations are funded. While regional governments are responsible for public services, they do not receive a sufficient share of national tax revenue to do the job. They accordingly run businesses and speculate in property to pay their bills -- ignoring the laws they are supposed to enforce in the process. The risk of unrest is greater in provincial cities and regional centres, where people protest when property is seized for developments, than in big industrial centres of the east where there is vastly more wealth to share.

There is nothing panicky about Mr Wen's plans. The power of the party is not under threat. While people in the West are appalled by the absence of open elections and restrictions on free speech, the way China has become immeasurably more affluent since the economy was liberalised 30 years ago makes the overthrow of the authoritarian regime less unlikely than impossible for the present. Mr Wen understands a rise in unemployment and a drop in low-paying wages, as the stimulus funding that followed the global financial crisis runs out, could bring protesters on to the streets. If this happened, the party would need to demonstrate it was committed to protecting peasants and migrant factory workers. Mr Wen is acting to protect the party from what could occur if the poor saw themselves as being exploited in a slump. He knows the rule of law must be seen to apply equally to all, from peasants to party leaders, even when it does not.

It is not so different in Australia, where the States have responsibility for Health and Education, but not the tax revenue to fund it. In residential towers in China you will see a poster and photo of your local police officer in charge of keeping the peace in your area ... with his after hours phone number and that of his superior officer in case you wish to make a complaint. Wish we had that level of service from our police here, to tame the hoons and ensure public safety. There is one advantage China has economically - they have not spent public tax funds sending troops to fight wars in foreign countries, as have our USA, UK, Europe and our fair land over past decades. Let us acknowledge sometimes that in some of these great growing lands such as China, things are not all bad. Would they be achieving so much if they were not doing lots right, and looking after the great majority of citizens in most ways most of the time?

excellent article for a western newspaper. fair but not pandering to either constituent. not the usual rabid propaganda you see in western newspapers (whose journalists just copy from the wires)

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