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No room at the banquet

During the Tang dynasty, poet Du Fu commented on the social inequities and debauchery of his day among corrupt officials and the wealthy, writing: Zhumen jiu rou chou, Lu you dong si gu. ('Within vermillion gates wine and meat rot, While on the street outside people starve to death.')

Written over 1,200 years ago, such lines spring to mind today amid the luxury of a typical banquet for government officials and their capitalist Chinese entrepreneur cronies. They are feted with the world's finest seafood and the most expensive, imported wines, while their luxury cars are parked outside.

Meanwhile, at the end of last year, there were 23.65 million impoverished people in rural China who simply did not have enough to eat, according to official statistics. Another 40.67 million people with low incomes were searching for a way out of their desperate situation. Many were turning to crime, drugs and prostitution - which have now become pillar industries of the Chinese economy.

If you ask Beijing officials - as they feasted in five-star hotels - about the problem of poverty, they would most likely shrug and dismiss those waidi ren, or 'rural outsiders'. They give definition to China's new class system, which appears more like a caste system.

Many outside economists point with concern to the widening income gap, warning about the sustainability of China's economic model. China's Gini coefficient - a measure of unequal income distribution - has reached the internationally acknowledged warning limit of 0.4, which should set alarm bells ringing in the elite Zhongnanhai compound.

This is precisely what occurred last month, when the Communist Party's Central Committee called a symposium of various interest groups. They included the All-China Federation of Industry and Commerce, so-called democratic parties and hosts of non-communist social representatives.

This broad spectrum of groups was summoned to discuss how to cope with the issue of 'reforming and standardising income'. Some observers might have seen it as a massive lobbying effort to maintain a social pact between the Communist Party and the rest of society.

That's because those spending lavishly on five-star lifestyles are mostly government officials and state-owned enterprise leaders, while rural China struggles with poverty. The meeting was held in Zhongnanhai, underscoring the importance and sensitivity of the party's concerns over this ticking time bomb.

As expected at such meetings, a five-point programme was issued - presumably to be studied at more symposiums at luxury resorts. The five points are: 'Pay more attention to social equity; increase the incomes of low earners; expand the proportion of medium-income earners; regulate high earners effectively; and forbid illegal incomes.'

As for paying attention to social inequity, anyone can do that by stepping a few metres outside their luxury hotel. But other requirements, such as forbidding illegal incomes, may be difficult to implement: illegal incomes are propping up the prosperity of many at the top.

The income disparity heralds an era of problems that have already been experienced by other developing countries, such as Indonesia. Namely, that society remains stable as long as income gaps don't widen. As those gaps expand, however, social contradictions intensify, and there is a sharp increase in the probability of sudden, turbulent economic situations.

It was concern about just such income inequity that allowed Marxist ideals to filter into Peking University, in the first half of the last century, inspiring people like Mao Zedong to overthrow the existing system with all its inequities.

China's government at the time lacked principles and catered to foreign economic interests - so obviously the things that occurred then couldn't be repeated. That must be reassuring for everyone. Then again, if Mao's ghost was listening in to the meeting last month in Zhongnanhai, what might he suggest doing?

Laurence Brahm is a political economist, author, filmmaker and founder of Shambhala Foundation

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