China recently announced its GDP grew by more than 7.1% in the first half of this year, putting the country on course to displace Japan as the world’s second-largest economy by year’s end. But it’s not time to break out the maotai just yet. Peasants and migrant workers, who compose more than 65% of China’s 1.3 billion people, aren’t benefiting much from this growth.
Much of it is hoarded by the central government. Last year, Beijing collected taxation and other levies of more than six trillion yuan ($878 billion), an eye-popping four trillion yuan more than five years ago. Since the turn of this century, funds flowing into the Beijing treasury have increased by around 22% a year, more than double the average 10% GDP growth for the past two decades.
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