Saturday, March 3, 2012

Chinese Communist Party hacks: the new billionaires

At some point in the not too distant future there will be some major explosions in China.  Not that there haven't been already. The country has thousands upon thousands of protests, strikes and various clashes with the authorities every year.  The struggles at some of the factories have led to wage increases of 20% or more, enough to force some capitalists to consider moving production to Vietnam where workers are cheaper. But the massive accumulation of wealth of those among the ruling party elite and the merging of politics and big money will mean even more violent and open clashes ahead.

The rapid growth of the Chinese economy has brought in its wake increased inequality and incredible wealth for the Communist Party bureaucracy.  A recent survey, the Hurun Report, released by a Shanghai publisher of luxury magazines from public information revels the extent of the inequality.  The per capita annual income in China in 2010 was $2,425 according to Bloomberg Business Week; this is lower than in Belarus. (The Communist Party's Capitalist Elite: BW 3-5-12)

Meanwhile, the 70 richest members of the National People's Congress which is China's legislature, "Added more to their wealth last year than the combined net worth of the entire US Congress, the president, his cabinet and the entire Supreme Court." BW adds.  The combined net worth of the richest 70 legislators in the NPC  was $89.8 billion in 2011 according to the report while the Center for Responsive Politics in the US put the combined net worth of the 660 officials in the three branches of US government at $7.5 billion.  Quite tidy sums and certainly shows that politics pays, even for so-called "Communists".

And like the US, in China the political representatives of the "people"and the new capitalist class are more often than not one and the same.  China's second richest person with a family fortune of around $11 billion is a member of the legislature.  China's richest woman is also a member as are other captains of industry like Lu Guanqui, an auto parts billionaire.

The US Congress and China's legislature have much in common although the "communists" appear to have been more successful at ripping off workers.  Many of the new capitalist class not included in this exclusive club are not happy about these developments-----the power and influence of China's 1%----- not because they object to wealth stolen from the Labor of others but because of the lack of similar opportunities for them.  

"In all levels of the system there seem to be local officials in cahoots with entrepreneurs, enriching themselves"
says Bruce Jacobs an Asian studies professor in Melbourne. Sounds a lot like Washington doesn't it.

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