Globalisation is
defined as the increase in trades and services around the world which allows
the country to gain profits (WHO, n.d.). China is one such country that makes
use of the advantages from globalisation to promote their market in increasing
their gross domestic product (GDP). However, with globalisation, China has been
presented problem inequality. Although globalisation has aided China in
overcoming the economic downturn, it has also created several forms of
inequalities. Zhang and Kevin (2010) has also stated that income and regional
inequality were contributed by globalisation. The most common form of
inequality would be the income inequality of which will be the main focus point
in this paper. This essay will discuss on the how globalisation leads to income
inequality, the impacts on China and the existing measures taken together with
proposed solutions to tackle the growing income gap. This has been a growing
issue in China, though hard to eradicate, requires a sustainable amount of measures
to reduce the impact of inequality.
China being one
of the fastest growing economy for three decades, tolerated a side-effect from
globalisation which has widen the gap of income distribution therefore causing
income inequality. The salary of the lower-skilled workers decreases while higher-skilled
workers increased thus shows the presence of biasness that leads to income
disparity. Li Shi (N.D.) discussed that the policies implemented by China tends
to be more biased towards the urban areas which caused the income disparity
between the urban and rural. Income disparity also leads to unequal education
system between the urban and rural areas. Residents from rural areas were more
inclined to have lesser skills and education as compared to the urban
residents. This can be support from Li Gan (2013), who states that lower-income
households are likely to have lower education levels. The education gap among
rural areas leads to consequential income disparity. Furthermore, the situation
has worsened when corruption was found amongst bureaucrats, and the area impacted.
Xue Jinjun et al. (2014) noted that corruption has a strong impact on the
equality and integrity of China’s income distribution.
The existing
measure in China to tackle the income disparity among urban and rural areas is
the taxation payable by its people. In this case, China’s income growth was
able to stay at the top because of its focus on the higher growth rates. Evidence
from Talley (2015), who quoted from two economists, Cevik and Correa stated that
China was able to have a faster income growth because they were targeting more
among the rich and neglecting the poor. Therefore, raising the taxes on the
rich could help narrow the income gap. However this should not be based on earning
money but rather used to fund education, health care and other social services.
Additionally, China could also lower the labour taxes from the low and middle
income families. In addition to providing more for families with lower income,
the Government should attempt to increase the skills of this population to
better bridge the income disparity gap.
Education will
be more beneficial for the higher income residents than the lower income
residents due to the affordability. Although education could be a solution to
these problems, it is difficult to sustain for a larger population. With
consideration on how large the population is in China, it is difficult for most
people to be able to afford higher education. Therefore, education became a
form of investment rather than a necessity. By having higher education attainment
could lead to more opportunities of having a decent paying job. Hence, this
would help to contribute to society and hence leading to higher economy. However,
the poor would not be able to afford education as easily as the rich.
Therefore, funding from the government is another possible way to aid the poor.
Additionally, increasing the amount of educated people would not only assist
China in reducing the income gap but also raising the income growth. According
to Ning (2010), encouraging more people to be educated would be beneficial in
reducing inequality. However with more educated people could lead to corruption
problem due to greed and will attempt to corrupt its economy for their own
benefits.
The impact of
corruption as supported by Gupta et al. (1998) states that income distribution
will be affected by corruption. This therefore leads to an increased disbelief
in the Government. However China under the leadership of President Xi Jinping
has been tackling the problem persistently (Ting Shi, 2016). The Government has
adopted policies such as the anti-corruption measures that aided in educating
their officials aiming to prevent corruption at its roots. However, the credibility
of the Government was not strong as it is difficult for the Government to
supervise the large amount of the probable corrupted officials (Qian & Wen,
2015). Hence, in order for the Government to give assurances to its people,
they must have no tolerance to its corrupted officials as argued by Reuters
(2014), stating that the Government has adopted zero tolerance approach to
corruption. Consequently reducing the income disparity that was brought on by
the corruption.
Nonetheless, globalisation
has its merit in helping China but could also trigger the unnecessary
inequalities. The issues are possible to mitigate but would not be completely eradicated.
Even though the measures could be sustainable, the disparity in income gap
among the urban and rural areas could only be reduced. The limitation in
providing education remains and corruption would be an interminable hurdle.
Word Count (excluding cover, references and other texts):
889
References
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