Who would have guessed that incomes are more unequal in Communist China than in the United States? Not me.
A new report from Peking University, cited in the Financial Times, says the richest 1% of China’s households own a third of the country’s wealth. The poorest 25% own just 1%.
Peking University’s report put China’s Gini coefficient, a widely used measure of income inequality, at 0.49 in 2012. As the FT reported, the World Bank considers coefficients above 0.40 to represent severe income inequality. Among the 25 largest countries by population for which the World Bank tallies this measure, only South Africa (0.63) and Brazil (0.53) clock in higher than China. The World Bank puts the U.S. figure at 0.41, Germany’s at 0.30.
Wealth inequality — as opposed to income inequality — is higher in the U.S. than in China, the FT reports. The wealthiest 1% of U.S. households owned 42% of all U.S. wealth in 2012.
The newspaper noted that corruption and unreported income make estimating income and wealth in China difficult. Peking University’s numbers, based on a survey of about 15,000 households in 25 Chinese provinces, put China in a less favorable light than official Chinese government figures.
A separate report cited by the Financial Times says the number of dollar millionaires in China has risen by 8% in a year. They are now said to number 3.14 million. If recent press reports are accurate, some of them may be looking through open houses in your neighborhood.