in China Xu Dianqing University of Western Ontario, Canada Li Xin Beijing Normal University, China

Transcription

1 Income Disparity in China Crisis within Economic Miracle Xu Dianqing University of Western Ontario, Canada Li Xin Beijing Normal University, China World Scientific NEW JERSEY LONDON SINGAPORE BEIJING SHANGHAI HONG KONG TAIPEI CHENNAI

2 CONTENTS Preface vii Chapter 1. The Widening Gap between the Rieh and the Poor will Inevitably Divide the Society Pacing the Fact of the Widening Gap between the Rieh and the Poor Gini Coefficient: A Measure of the Gap between the Rieh and the Poor Three Gaps and Six Combinations Regional Factors of the Gap between Urban and Rural Areas Income Gap among All Classes of Society Urban and Rural Factors in the Gap between the Rieh and the Poor The Gap between the Rieh and the Poor and Social Stability The Limitations of the Gini Coefficient Different Policies to Govem the Three Gaps 25 Chapter 2. Lewis Turning Point Lewis Model of Chinese Transition in a Dual Economy Boundary division and the basic assumption of a dual economy How many turning points are there? Three curves in the Lewis model 33 XV

3 xvi Income Disparity in China Labor transfer trilogy in the Lewis model Six stages of labor transfer in China Incentive Mechanisms for Farm Workers to Seek Jobs and Conduct Business in Cities How to Judge the Lewis Tuming Point Miscellaneous definitions Basic characteristics of the Lewis tuming point Estimation of the rural labor price Estimation of the agricultural marginal productivity of labor Relationship between the marginal productivity of labor and the average labor productivity Does the increase in wages indicate the Lewis turning point? Regional gap and the Lewis turning point The income difference between the skilled labor and the unskilled labor Quantitative Analysis of the Lewis Turning Point Theoretical model of judging the Lewis turning point Estimation of the capital stock Results and limitations of the theoretical judgment Why is there concem about the Lewis turning point? 56 Chapter 3. Surplus Rural Labor Is There Surplus Rural Labor in China? Definition of Surplus Rural Labor Estimation Method of Surplus Labor Very Different Estimates Estimation of Surplus Rural Labor 83

4 Contents xvii 3.6 Approaches to Transfer the Surplus Rural Labor An Arduous Historical Task Removing the Obstacles in the Transfer of Surplus Rural Labor Force Speak for Whom? 98 Chapter 4. Story Behind the Labor Shortage How Does Labor Shortage Occur? Cyclical Changes in the Population Structure Regional Characteristics of Labor Shortage Farm Workers' Rational Choice Labor Shortage and Industrial Upgrade Labor Shortage in Terms of Farm Workers' Age, Education, and Psychological Characteristics 119 Chapter 5. Rule of Industrial Transfer Labor Shortage and Industrial Transfer Historical Track of the Transfer of Labor-intensive Products America: The First Runner in the Relay Race Japan: Recipient of the Baton from the United States Four Asian Economic Giants: Receiving the Baton from Japan China: The Fourth Baton Changing the Rule of Wages in Industrial Transfer Industrial Transfer: Inexorable Law of Economic Development Length of Time for Holding the Labor-intensive Products Industrial Transfer and the Migrant Worker Passing the Baton of Industrial Transfer to the Next Economy 144

5 XV111 Income Disparity in China Chapter 6. Consumption and Expansion of Domestic Demand Theory of Economic Growth Stages Expansion of Domestic Demand and Investment in Infrastructure Residents'Consumption Does Not Decline The Increase in Residents' Consumption Level Requires Comprehensive Treatment Do Government Subsidies Stimulate Consumption? The Drinker's Heart is not in the Cup 168 Chapter 7. How Long Can the High Savings Ratio Last? Is the High Savings Rate at Fault? Consumption and Savings: Any Increase for One Must Mean a Decline for the Other Savings Ratio of Countries in the World Varies Considerably Consumption Theory and Elements that Determine Savings First-Generation Effect of Savings Empirical Analysis of China's Savings Rate How Long Can the High Savings Rate Last? Never to be Misled by Others in Exceeding the Proper Limits in Righting a Wrong 192 Appendix Chapter 8. The Proportion of Labor Compensation The Confusing Question Is the Proportion of Labor Compensation Actually Declining? Change in the Statistical Rules Reduces Labor Compensation Change in the Industrial Structure Results in the Declining Proportion of Labor Compensation 204

6 Contents xix 8.5 Influenae of the Adjustment in the GDP Data on the Proportion of Labor Compensation Is the Proportion of China's Labor Compensation in the GDP Low? Neither Meeting Trouble Halfway Nor Making Much Ado About Nothing 212 Chapter 9. Is the Gap Between Urban and Rural Areas Widening or Narrowing? Determining the Cause and Applying the Right Solutions The Strange Phenomenon Violating the Economic Theory The Division of Urban and Rural Populations Space Distribution of the Farm Workers Is the Farm Workers' Income Included in that of the Urban Residents or the Rural Residents? Narrowing the Gap between Urban and Rural Areas is A Serious Challenge at Present 226 Chapter 10. The Minimum Wage Law is a Double-edged Sword The Trend in Increasing the Minimum Wage Minimum Wage in Countries all over the World The Calculation Method for the Minimum Wage The Dispute Sparked by the Minimum Wage Law When to Set up the Minimum Wage Market Mechanism and the Minimum Wage Law Balance Between the Market and the Government The Timing of Implementing the Minimum Wage Law Timeline of the Implementation of the minimum wage law of the four Asian economic giants Chinese Taiwan: South Korea:

7 XX Income Disparity in China Chinese Hong Kong: In discussion Singapore: No minimum wage legislation Relationship Between the Minimum Wage and the Unemployment Rate Postponement of Increasing the Minimum Wage Appendix Chapter 11. The Population Trap and the Demographic Dividend Distinguishing the Stock and Increment of Labor The Necessary Condition for the Population Trap Cyclic Fluctuation of Population Distribution in China Disturbance of the Population in China Population Fitted Line of Developed Countries Trend of the Population Structure Change in Developing Countries Demographic Dividend and Economic Growth Chapter 12. Tax Reform and the Gap between the Rieh and the Poor Three Levels of the Distribution Mechanism A Vague Statement is Difficult to be Implement How to Promote Fairness in the Production Link The Goal of Tax Reform is to Reduce Taxes The Planned Economy Characteristics of the Current Tax System Basic Concept of Tax Reform The Computable General Equilibrium in the Tax Reform Scenarios and Results Will the Reduction of the Tax Rate Diminish the Government Tax Revenue? Property Income and the Income Gap Specific Conditions of Tax Reform 321

8 Contents xxi Why is Tax Reform Extremely Difficult to Implement? 323 Chapter 13. Preparing for Danger in Times of Peace to Prevent a Financial Crisis Financial Risks Brought by Excess Currency Liquidity The Dammed Lake Formed by the Savings Deposits of Urban and Rural Residents Seriously Distorted Fund Flow Threat of the Negative Interest Rate Will Deflation Occur? Prevent Imported Inflation Preparing for Danger in Times of Peace and Strengthening Awareness of Crisis Characteristics of a Financial Crisis Rapid Economic Development Does Not Mean No Financial Risk Deal with the Situation Calmly to Solve the Crisis Chapter 14. Populism Experiment of Latin America The Results of Promoting Populism Come in Opposites The Rise and Fall of Peronism The Mud Left by Populism Chile's Populism Tragedy The Lessons of Populism in Latin America 363 Chapter 15. Who Divides Thailand? Where Did the Red-Shirt and Yellow-Shirt Armies Come From? Source of the Upheaval in Thailand Polarization Intensives the Gap between the Rieh and the Poor Blood-stained Street Füll of Violence and Unrest Division of Society Led to Unending Trouble 377

9 XXII Income Disparity in China Chapter 16. Criticizing Populism and Depending on Market Mechanisms to Narrow the Gap between the Rieh and the Poor What Is Populism? Origin of Populism Noble intellectual stage of populism Civilian intellectuals paved the way for the Bolshevik Populism and social morality Variability of Populism Paradox of Populism Reasons and Conditions for the Spread of Populism Consequences of the Spread of Populism Guided Populism According to Circumstances and Taking Precaution Beforehand Dangerous Sign of a Divided Society Two Sides of a Coin: Market Mechanism and Government Intervention The Sole Basis of Government Policies is to Liberale Productive Forces and Promote Social Progress References 409 Index 417