The Wealth Disparity in China
The uneven distribution of wealth in the United States is already a major problem, but the problem is even larger in China, with the population living in rural provinces being stuck into a cycle of poverty. As the rich in the cities get wealthier, those who live in the villages are being left behind. In 2014, the average national income per adult in China was 28,844 Yuan, which is $4,814 in today’s money. To contrast, the average national income per adult in the US was $55,613. In 2018, the 100 wealthiest people had an accumulated wealth of $643 billion, while the bottom 40% of Chinese households only collectively owned $637 billion in assets. Although the GDP of China has been increasing at an exponential rate, the average income only increases slowly.
Source: National Bureau of Statistics of China
Source: IMF World Economic Outlook, April 2019
What causes the uneven distribution of wealth?
Many factors contribute to the ever-increasing wealth disparity in China, but the most significant factor is the lack of access to quality education. In China, the deciding factor for college admissions is the score on the Gaokao. This means that a high score on the Gaokao is guaranteed to get a student into a top college. For employment, most high-paying jobs require applicants to go to a top college and most employers will only hire from top colleges. Although statistics for Gaokao score distribution by province are not available, one of China’s most sought-after elite universities, Tsinghua University, provides statistics for admitted students from each province. It is possible to infer that the Gaokao score has a positive association with admission into Tsinghua. Students that do not get into top colleges are significantly disadvantaged when trying to find a job. Since rural provinces score significantly lower than those living in urban areas, this means that rural students have a much lower chance of getting a job at a tech company or bank and a much higher chance of getting a job at the construction site or taxi company. These low-paying jobs lock people into a cycle of poverty, since they do not have the resources to effectively prepare for the Gaokao compared to those living in wealthy areas.
Source: Tsinghua University
A glance at the chart shows that large, wealthy provinces have a disproportionate amount of admitted students compared to rural provinces. For example, Henan, a rural province that Spring Sprouts targets, has the lowest amount of admitted students. A graph of average income by province shows that the provinces on the lower end of the graph also happen to be on the lower end of the Tsinghua graph.
Because of the Gaokao’s influence on the future of a student’s educational journey, wealthy provinces are also big spenders on tutoring. Students in wealthier provinces also have access to better education at school (See teaching requirements blog for more information.) Teachers at rural schools usually do not pass the teaching requirements but are teachers anyway due to a lack of enforcement. Teachers living in urban areas are reluctant to teach at a rural school, even with any added bonuses, because of the poor conditions in rural areas.
Source: Federal Reserve Bank of St. Louis
How does Spring Sprouts tackle this issue?
Fixing the disproportionate wealth distribution in China is more complicated than just giving money to those living in poverty. Here at Spring Sprouts, we attempt to tackle this issue by addressing the core: educational inequality. We are passing along the education that we receive here in the United States to the hardworking students in Henan that do not have access to it. In order to reach out to the students, we created engaging and interactive learning environments, which was a refreshing experience compared to their normal classes at school. Although we currently only operate in a small village in Henan, we hope that our message can be heard around the world, inspiring others to follow suit in other provinces.