- Chinese President Xi Jinping said China would focus on Common Prosperity for all, rather than just a few, state media said.
Two of the world’s dominant economic models (America & China) are currently being tested during the Pandemic. China has taken the initiative in addressing its core issues and focus on sustainable long-term growth.
Recently China has made moves to counter the Wealth Inequality in its country; this, in turn, has put the U.S in the awkward situation of standing by and watching as a major competitor is taking the initiative in combating Inequality in its country.
Current Steps China has taken to address Inequality
- Private tutoring regulations – China’s educational sector has grown in large part due to the importance average families put on education. private tutoring market is estimated to be valued around $120 billion
- Antitrust fines on internet firms for Monopolistic practices. Major tech companies are facing fines and laws that would limit Monopolistic practices and incentivise more competition.
- Guidelines on the treatment of gig workers. As more an more workers enter the gig economy China is passing laws that safgaurd those workers.
- Steps towards a property tax. Large corperation will now face new property taxs.
With China’s Government moving to fix the wealth Inequality, Corporations are following suit
Five of China’s richest and most high-profile tech billionaires pledged at least $13 billion of their personal or corporate fortunes to charitable foundations and initiatives, a sum that far exceeds previous years’ totals. the Hurun China Philanthropy List 2021.
The U.S for its part is a staunch believer in the Trickle-Down Theory, which has only exacerbated the Inequality in its country.
Corporate-backed politicians maintain the belief that the market forces will eventually reward those that are temporarily poor. Many Americans see themselves as (temporarily embarrassed millionaires). As such, many American citizens vote against Politicians that favor Tax Cuts for the Rich, thus the reason for voting against their own interests and vote against taxing the ultra-rich.
A new study named “The economic consequences of major tax cuts for the rich” has pointed to major flaws in America’s Trickle-Down Theory.
In a refute to the tired and old belief tax cuts for the wealthy are good for the economy, A study found that to be incorrect, the study concluded that ‘Trickle-down’ tax cuts that make the rich richer but are of no value to the overall economy,
INCOME INEQUALITY, 1820-2020
An example of the imbalance: Elon Musk is the world’s richest man, and his net worth is about 488,000 times that of an average American.
Why is Wealth Inequality a Geopolitics Issue?
American Politicians are currently using China as its scapegoat instead of focusing on its own core issues that need to be addressed. History has shown Governments that have internal hardships & economic disorders oftentimes blame others for their own circumstances. The U.S’s inability to tackle its own wealth inequality and focus on sustainable growth instead of maintaining Boom and Bust cycles it has grown accustomed with. Those Boom and Bust cycles have contributed to its current economic situation by increasing the wealth gap of the average American. The American Corporate pandering has allowed corporations the ability to move manufacturing overseas in order to maximize profits and still maintain historically low taxes.
- U.S federal minimum wage 2021: $12.00
Instead of improving the cost of living for the average American worker via cost of living pay increase, Politicians voted against any minimum wage increases every single time and also voted against tax increases for corporations that moved manufacturing operations overseas. The U.S Politicians easily managed to put all the blame on China with the U.S media’s (lazy journalism) help, ultimately China can only be blamed for doing nothing more than accepting to manufacture for a customer.
- Unlike the U.S, China has not let nationalistic rhetoric overtake its media, The U.S is currently experiencing a circle jerk of (ANTI CHINA) news, so much that anti-Asian hate crimes are skyrocketing throughout the U.S.
China can only maintain trust in American Bonds for so long.
The current Anti China rhetoric has not gone unnoticed in China, Zhang Weiwei, director of the China Institute of Fudan University, told the Global Times that “when some arrogant US scholars try to lecture me that China’s economic system should unconditionally copy US capitalist system, as they believe the US model is more advanced, I just say that the next time the US faces another financial crisis and asks China to purchase its bonds again, we will probably say no. We do not want to waste our money to save an ungrateful country – globaltimes.cn