Cracks Miracle

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Opaque activities offshore of kin of the Communist elite, documented in the databases of two management to which I had access to this journal, shed new light on one of the subjects most destabilizing potential of contemporary China: the growth of social gap between rich and poor.

The rise of the Asian giant has so far been very rapid, peaceful and stable. The egalitarian utopia commune promoted by Mao and the capitalist swing embodying the forest of skyscrapers of Pudong district in Shanghai are antipodes coexisting in the lives of millions of Chinese: in his memory and in his eyes. In a few decades the country has experienced a gentle revolution that has brought poverty to hundreds of millions of people. Along the way, the country has become the second - largest economy in 1990 was still the tenth, according to the International Monetary Fund (IMF) - main trading power. Su, although still significantly lower than the U.S., international politics and military projection moves steadily towards the superpower status.

But social inequality associated with this growth is a reality that the Chinese leadership peat. The dome fears the unrest and protests that the unbalanced distribution of income can lead to the point of having turned the issue into a real political priority. In this light one can read the regime's decision to block the web pages of this newspaper and other international capitals, in collaboration with the International Consortium of Investigative Journalists, published information detailing the opaque financial maneuvers of the Chinese elite and thus threaten to exacerbate the discomfort by growing social divide.

The opaque capital outflows and inequality are closely related, because the first significantly promotes the second, he argues Dev Kar, chief economist at Global Financial Integrity (GFI), a study center and dedicated to the subject complaint. "Illicit capital flows to tax havens reduces the salary base, and thus the capacity for collection and redistribution of the state", said by telephone from Washington Kar, who previously worked at the IMF and the author of a specific study on the illicit capital outflows from China.

Precise quantification of the movement of capital is dark, of course, impossible, but the GFI has developed a fairly sophisticated evaluation system which estimates that in 2011, the latest year available - illegally left China some 150,000 million, about 12% the Spanish gross domestic product (GDP).

If the growth rates of the Chinese economy has been dramatic since Deng Xiaoping launched his reforms in 1978 - an average rate of 10% in the past three decades, has also been terrifying the rise in inequality. The Gini coefficient, a statistical indicator measuring the distribution of income in a society, has starred in a rapid escalation in those 30 years. In 1984, it stood at 0.27, a figure that portrays a very egalitarian society (on a scale where 0 is perfect equality and one inequality completely with all the income in the hands of an individual -).

In January last year, Chinese authorities indicated that this ratio was 0.47. Significantly, it was the first time in a decade that Beijing published the data in a clear sign of its concerns. Equally significantly, the Chinese social networks reflected a widespread sarcasm about the rigor of the data, many citizens felt down makeup. Independent studies raise the odds in some cases up to 0.61, which puts the country level, led by a communist party is still called - among the most unbalanced world. Experts believe that above 0.40 results portray societies at risk of friction by inequality. European countries are generally between 0.25 and 0.37 U.S. 0.45 round, according to the World Bank.

Hu Jintao, Xi Jinping ancestor of the Chinese president, made ​​the concept of " harmonious society " a real mantra of its mandate. Beijing The Executive has announced and implemented in recent years several plans to reverse that trend. According to their statistics, they have begun to have an effect with a drop in the Gini coefficient from a peak of 0.49 in 2008 to 0.47 in 2012.

The latest plan, announced early last year, calls for increasing the minimum wage, raise more taxes in public enterprises to fund social programs and increase spending on education. These measures are part of a comprehensive package with 35 lines of action.

The paranoia of the Chinese leadership on this issue should be framed in the context of a country that claims of rights begins to make a noticeable pulse. A study by Sun Liping, a sociology professor at Tsinghua University in Beijing, estimates that in 2010 there were 180,000 known as " incidents of mass protests " definition that includes everything from strikes to riots and rallies. The figure is double that of 2006, and 20 times more than in the mid- nineties.

This social awakening, in turn, is part of an economic framework that gives some signs of slowing down after three decades of extraordinary pull. " China's economy must grow at a rate of 8% to create a sufficient number of jobs to ensure social stability and absorption of new generations work," said Kar. In the past two years GDP growth has been a few tenths lower that threshold. Other economists lower the breakeven point to annual GDP growth of around 6 % -7 %.

The urgent need to raise more taxes to provide better benefits to the predictable aging of Chinese society - determined by the one-child policy, and the likely economic slowdown Kar induce to think that the Chinese authorities will narrow the circle around opaque capital flows.

In 2011, the latest figure available, China raised taxes by an amount equal to 26% of GDP, two more than 2007 points, but still eight points below the average of developed countries grouped in the Organization for Economic Cooperation and Development.

The social - spending including health and social housing policy is around 8% of GDP, also two points higher than in 2008.

Beyond the fear of social unrest, Chinese leaders also fear another derivative of inequality: the impact on consumption. In the transition of the economy from an overwhelmingly export model to another with greater weight in domestic demand, an unequal distribution of income can be a significant check.

professor at Harvard University Martin Whyte has studied for years the phenomenon of growing inequality and social perception in China. Whyte has conducted three surveys on the subject in 2000 (pilot, in Beijing), 2004 and 2009 (both at national level). The conclusions of these studies are interesting: while surveys detected an upset regarding the income gap, the issue that really infuriates the Chinese is the gap between the powerful and no.

Whyte considers the fact that the income gap has been opened in a society where much of the population is improving their living conditions softens irritation. The improvement of social services also influences. Instead, the abuses of power are increasingly touching a chord, and most of the protests in China against expropriations are considered unfair and failures to ensure protection from contamination, among other reasons. In this light, the managing documents and Portcullis Trustnet Limited - Commonwealth Trust who had access to this journal, which reveals the great use of tax havens by rich relatives of top leaders, can strengthen the feeling of resentment against abuses of elites.

While there is abundant growth and jobs, these issues are relatively indigestible. The widespread development of welfare is the pillar that somehow legitimizes the Chinese Communist Party. A slowdown in the economy may make these issues dangerous sparks in a dry social environment with greater propensity to ignite.

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