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Rebalancing a Divided China
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Orlik cites a 2011 survey from China's South Western University of Finance and Economics, which surveyed 8000 households and found that 55% of Chinese households had little or no savings for that year. 10% of households control 86% of wealth and 56% of household income. Surveys in 1995 and 2002 showed 10% of households controlled 31% and 41% of wealth. In the U.S. top 10% of households control 74% of the wealth, according to the Federal Reserve figures. What this means, says Orlik, is that before China can shift to consumption based growth the low incomes of the majority of households have to go up, requiring a major policy shift. Under current policies and even with movement in the direction of the DRC/World Bank policy report for China for a gradual shift away from state owned enterprises, there is little prospect for rebalancing the world economy.
The extraordinary shift in wealth controlled by 10% of the households in China from 31% in 1995 to 86% in 2011, which makes a shift to consumer spending and rebalancing the world economy less likely
10/03/2012
By comparison estimates show 10% of the households in the U.S. control 74% of the wealth. Most of the shift in wealth happened in the last 10 years 2002-2011, as by 2002 41% of the wealth in China was controlled by 10% of households. About 55% of China's households had little or no savings for the year, in this 2011 survey cited by NYT's Orlik, which means a shift to consumer spending for the Chinese economy is less probable in the short run.
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