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This is an intersting article, china is supposed to be up and coming but appears only for the corrupt few while the rest live on peanuts.

Yuan is about 9p.

Gucci Snake Bag Draws Ire in China as Wage Gaps Widen (Update1)

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By Bloomberg News

Oct. 1 (Bloomberg) -- At China’s newest Gucci store, in Shijiazhuang, snakeskin purses sell for the equivalent of $4,390, about twice the city’s per capita annual income. Next door at Brooks Brothers, button-down shirts go for $190.

“Shijiazhuang is becoming very well off,” Brooks Brothers saleswoman Wang Weixia, 24, says of the provincial capital, 291 kilometers (181 miles) southwest of Beijing. “A few years ago it was poor and backwards.”

Five floors up in the food court of the First Under Heaven mall, a lamb kebab griller surnamed Li has a different view. “The people here got rich by cheating others,” says Li, who earns 50 yuan ($7.30) a day and declined to give his full name.

The scene in Shijiazhuang is replayed across China, where a 30-year economic boom has lifted hundreds of millions of people from poverty at the price of yawning income gaps. China’s Communists came to power 60 years ago today, promising a utopian society run for the benefit of peasants and workers. Instead, it was ideological foes in neighboring Taiwan and South Korea that delivered economic gains more widely and equitably.

The growing wealth gap is a top concern for President Hu Jintao and Premier Wen Jiabao, who are dealing with rising protests from workers and farmers angry at corruption and the perception that some people are getting rich at the expense of many. Hu and Wen today took part in celebrations in Beijing marking the anniversary.

Narrow the Gap

In a Sept. 10 speech to the World Economic Forum in the city of Dalian, Wen said China must “narrow the gap in income distribution.”

In China “economic reform has not exactly been the tide that raised all boats,” said Nicholas Bequelin, a Hong Kong- based researcher for Human Rights Watch, which campaigns against abuses of power and for political freedom.

Nationwide, the number of so-called mass incidents -- including strikes, demonstrations and riots as well as ethnic clashes -- rose to about 90,000 last year from more than 80,000 in 2007, according to Wang Erping, a scholar at the Chinese Academy of Sciences in Beijing who studies unrest.

Many of those protests stem from anger that people are getting ahead through corruption, Bequelin says.

Official graft cost China as much as $86 billion a year and the chances of a corrupt official going to jail were less than 3 percent, according to a 2007 study by the Washington-based Carnegie Endowment for International Peace.

Gucci Sales

China’s wealth boom is creating a surge in spending on luxury goods. Gucci Group, owned by Paris-based PPR SA, says sales in China, including Hong Kong and Macau, accounted for 17 percent of global revenue in the first three months of this year. Gucci has six stores in Beijing, the same number as in metropolitan New York, its Web site shows.

Beijing has more wealthy people than any other city in China, with 143,000 worth 10 million yuan or more and 8,800 with assets of at least 100 million yuan, according to the Hurun Report, which tracks China’s rich.

At the same time, 204 million people in China lived on $1.25 a day or less as of 2005, a 2008 World Bank study showed.

Expenses for health care and education, once provided at no cost for many workers, are pushing more people into poverty, said Dorothy Solinger, a professor at the University of California at Irvine who studies China’s urban poor.

“There isn’t a sense of upward mobility,” Solinger says. “There is a perpetuation of underclass.”

Taiwan, South Korea

China’s path to growth contrasts with Taiwan and South Korea, which industrialized over the past few decades with greater social parity, as measured by the Gini coefficient.

The higher the number on the gauge, the greater the disparity of income in a country, with a value of zero indicating perfect equality and a value of one signaling one person holds all of the wealth.

China’s Gini coefficient in 2004 was 0.438, rising from 0.302 as the Communist Party began to open the economy to market forces in 1978, according to a 2008 report by Chen Jiandong at Southwestern University of Finance and Economics in Sichuan.

In Taiwan, where China’s Nationalists fled in 1949 after the Communist victory, the coefficient stood at 0.321 in 1964 as the island began its period of rapid growth. The gauge fell to a low of 0.278 in 1980, before rising to 0.341 in 2008, according to the Survey of Family Income and Expenditure.

South Korea’s Gini index in 2008 was 0.316, government data show. From 1967-85, the Gini averaged 0.36, according to the United Nations.

Chinese Hinterland

Unlike China, Taiwan and South Korea haven’t had to develop a hinterland with hundreds of millions of peasants. To kick off development, China in the 1980s began to open up coastal areas for foreign investment and trade, exacerbating inequalities by keeping other regions closed.

The income gap may narrow as more Chinese move to richer urban areas for work. By 2025 about 64 percent of the population will live in cities, up from 44 percent now, according to a report by McKinsey & Co., a management advisory firm.

Outside the Gucci store in Shijiazhuang, a weathered young man from the countryside surnamed Lu delivers water to the mall on a three-wheeled motorcycle. On a good month, the work pays about 1,000 yuan, said Lu, who declined to give his full name.

“There’re a lot of rich people in Shijiazhuang,” he says, pointing to new apartment buildings across the street.

At a nearby Rolex store, a salesperson surnamed Shen, who also declined to give her full name, helps sell dozens of the Swiss-made watches each month. One gold ladies’ timepiece was priced at 158,700 yuan.

“Business isn’t too bad,” she says.

For Related News and Information: U.S. Gini Coefficient: ALLX GINI <GO> News on Chinese protests: TNI PROTEST CHINA <GO>

Last Updated: September 30, 2009 23:44 EDT

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Its not that simple though is it? , in that stuff is cheaper there also...

Ie in Beijing recently we thought the hostel was expensive ie 6 RMB for a 660ml beer , so we took a bus out to the 4th Ring of Beijing which is non touristy and we found we could get a beer for 2RMB and a large meal for 3RMB.

To truely compare you have to use general commodities like coke , mc'ds hamburgers (both of which contain labour , materials and transport).

A person in Hong Kong invariably earns less than people in the UK on average but when there is little tax no VAT and such like people can have a similar life style yet on less raw money.

Korea the same the min wage there is 2000KRW , which is £1 , but the cost of living (especially outside Seoul) is very very low , with metro fares being 1 can of coke cost , a meal 1 can of coke cost etc.

Hence why I compare things in cans of coke, ie UK tube = 6 cans of coke for a typical zone 1 fare , HK its 1-2 cans of coke for a typical journey.

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