The country’s high GDP per capita disguises the fact that while Chinese tycoons make their fortunes, one in four children in Hong Kong lives below the poverty line
There was a fascinating article in yesterday’s FT on widening inequality in Hong Kong. Thanks to the city’s increasing prominence as a financial hub, house prices have risen 70 per cent since 2009 and the average property price in Hong Kong is 13 times the annual household income.
The country’s high GDP per capita disguises the fact that while Chinese tycoons and European financiers make their fortunes, one in four children in Hong Kong lives below the poverty line. And for every modern high-rise and sleek, high-tech bachelor pad there are families crammed into dangerous ‘cage homes.’
While rising global inequality has equally inspired grassroots movements like ‘Occupy’ and high-altitude conferences like Davos, the point is curiously often forgotten when hysteria flares up — as it inevitably does every few weeks or so — over China’s rising economic, political and military might.
In the short term the focus might be on China’s ‘landing’ and how soft or hard it will be, but the long-term problem for the country is whether the widening gulf between the have and have-nots will prove economically and politically sustainable.
China may have been little affected by the Arab Spring last year, but the country’s leaders should nevertheless look to Libya, Egypt and Tunisia as a cautionary tale of what can happen when a small section of society benefits from economic modernisation while the rest languish in poverty.
China will have to undergo fundamental reform before it can truly rival the US as a global superpower.
Read more by Sophie McBain