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Infographic of the Day: China’s Growing Wealth Gap

Okay, this chart by Visual Economics might might be one of the ugliest infographics we’ve ever featured. But there’s an important set of messages here.

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Maybe it seems like China’s eventual global dominance is inevitable. It’s not: China has some severe problems to solve, if its economy is to eventually surpass ours. For one, the environment there has already become disastrously polluted, threatening food production; for another, after decades of communism, they still haven’t proven that they can innovate and create intellectual capital–rather than simply copying and manufacturing. (One example: Chinese university education still relies on rote memorization.)

But social unrest is probably the biggest challenge. No other stat illustrates that better than the 400% income gap between urbane, city-slicker Chinese and those in the countryside. And rural Chinese still outnumber the city dwellers:

China wealth

Pundits have often said that for the Communist Party to hold onto power, it has to deliver 10% yearly growth (the recent, historic rate). If everyone’s getting rich quick, then there isn’t much reason to overthrow the government or go on mass protests. China’s Communist Party knows that–for example, when the recession hit, they swiftly enacted the world’s biggest stimulus package, as measured by percentage of GDP.

But the problem of the income gap is far more complex: There’s no obvious way for China to raise the living standards of its rural population to that of urbanites. Moreover, the country completely lacks any kind of social safety net: There’s no social security, health insurance, and any type of welfare.

If you were a Chinese farmer–making $800 a year if you’re lucky; always getting squeezed by corrupt local officials; and watching city slickers drive brand-new BMW’s–how happy would you be with the government? What would you do?

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