Failure to publish Gini figure hides Swazi level of inequality

PUBLISHED : Friday, 27 January, 2012, 12:00am
UPDATED : Friday, 27 January, 2012, 12:00am


According to reports out last week, Beijing's statisticians have failed to publish a figure for China's Gini co-efficient for the 11th year running.

If you are not familiar with it, the Gini co-efficient is considered the standard measure of income inequality. The formula for calculating it is truly frightening, with lots of brackets, Greek and Roman letters, both big and small, and a generous helping of superscripts and subscripts.

Happily, however, the concept behind it is simple enough. The Gini co-efficient measures a country's inequality of income on a scale of zero to 100. A score of zero would represent perfect equality, with everyone in the economy earning the same amount. In contrast, a score of 100 would see all the income generated by the entire country going to a single individual, while everyone else got nothing.

On this measure, the most equal countries in the world are usually reckoned to be Japan, which is famously uniform, and the egalitarian social democracies of Scandinavia. According to the World Bank, all get scores of around 25.

In contrast, the most unequal countries are to be found in Southern Africa. South Africa itself gets among the highest scores of all at 65. In general, any score above 40 is regarded as getting into territory where inequality is a problem.

The last time Beijing's statisticians published an official Gini co-efficient was in 2000, when they gave China a score of 41. Since then, they have kept quiet, saying only that they do not have sufficiently accurate data on different income groups to calculate a number. The inference many have drawn is that China's income distribution has now grown so unequal that the publication of a reliable Gini number would come as a severe embarrassment for the government.

To be fair to Beijing's bean counters, they really do not have accurate data, partly because of inconsistencies between how they collect data in cities and the countryside, and partly because the rich tend to hide their wealth.

But that has not stopped other people trying to come up with a number. The World Bank reckons China's Gini co-efficient for 2005 was 41.5. Researchers at the Brooks World Poverty Institute in Manchester came up with a score of 44.5 for 2006. And last year, Professor Li Shi of Beijing Normal University calculated that China's Gini number for 2010 hit 48.

With incomes rising much faster in urban areas than in the countryside, some academics believe that by now China's Gini co-efficient will have exceeded 50.

As the first chart above shows, that would place income inequality in China on a par with Swaziland, where absolute monarch King Mswati III, his 14 official wives and innumerable concubines live in sybaritic opulence, while the majority of his subjects scratch a meagre living from subsistence farming.

Yesterday's Monitor column fulminated against nationalist bigotry, but people everywhere find few things so amusing as national stereotypes. It used to be said in England, for example, that Irish construction workers could not be allowed tea-breaks, because it would take too long to retrain them afterwards. Vile slander of course, but unfortunately the South China Morning Post seems to suffer from a similar failing. After a couple of days off for the Lunar New Year, we let our usually high standards to slip a little when we returned to work.

Contrary to what the caption of yesterday's chart said, I can assure readers that absolutely no mainland mothers were born in Hong Kong last year. Here is the chart as it should have appeared. My apologies for the error.