Shoes aimed at developer show growing discontent
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Gaping gap
The central government has recently decided to banish 78 of 94 centrally administered businesses from the property market, but according to Pan, that's more like administering chemotherapy when radical surgery is required.
Pan said it is like destroying 78 "cancerous" cells, but according medical experts, the remaining 16 cells (enterprises allowed to remain) would become more vigorous, and malignant.
Wang Yongping, secretary general of the China Commercial Property Association, provided another perspective during the forum addressed by developer Pan. Wang said that after consulting SOHO China's annual report last year, he found its gross profit stood at 52 percent.
By comparison, the chief of diary products maker Mengniu revealed that its gross profit is 5 percent, and that's deemed an unusually high figure for those engaged in real business.
At that very same forum, a celebrity official observed that the Chinese economy is on the whole bubble-free, and there is no need to dampen the property market. But that pair of dirty shoes do suggest the situation is getting a bit explosive.
On Monday Xinhua published an investigative report titled "The wealth gap in China is testing the limits of social tolerance." The report ranks property development, mining and securities as among those sectors reaping "exorbitant profits" in China.
According to last year' Forbes' annual Chinese Billionaire List, property developers account for five of the top 10, 19 of the top 40, and 154 of the top 400. The rich list is sending a strong message: those who are engaged in honest work are being steadily sidelined.
According to Tang Jun, a researcher with the Chinese Academy of Social Sciences, statistically, both the poor and the richer have seen increases in their income in recent years. But when that is adjusted for inflation, the real picture is that the poor are getting poorer and the rich, richer.
According to an extensive income survey conducted by Beijing Normal University since the 1980s, the top 10 percent bracket earned 7.3 times more than the lowest 10 percent in 1988; in 2007 that ratio rose to 23.
Even for wage earners, the key word is not hard work, or intelligence, but the kind of professions you enter. If you happen to be in power supply, electronics, telecommunications, petroleum, tobacco, or other sectors that monopolize state resources, you would be automatically considered prosperous.
For years there have been repeated attempts at correcting the imbalances, to little avail.
One simple truth is that when money can be so concentrated in a few sectors, there is enormous scope for corruption, and money easily translates into enormous bargaining power, and political clout. As the property sector is now openly recognized as "a pillar industry," official boosterism has become part of stated government strategy to leverage high growth.
