Abacus | Asia’s rise gives the lie to the inequality myth peddled by Trump and Clinton

In the United States, a deep-seated sense of grievance about it has propelled Donald Trump all the way to the Republican presidential nomination. Not to be outdone, Hillary Clinton has placed tackling it at the centre of her own White House campaign. In Europe, it has been blamed for Britain’s Brexit vote, as well as for the rise of both far-right and far-left political parties around the continent.

There can be no doubt about it – in the West, rising economic inequality is the dominant political issue of today. Media pundits fulminate against its iniquities, Davos delegates debate its causes, would-be social justice warriors condemn its consequences, and academics who study it are accorded the unlikely status of “rock stars”. Where other political questions divide, inequality unites. The chattering classes are unanimous: rising inequality is a bad thing, and something must be done.

There is just one problem: inequality isn’t rising. Globally, income inequality has been falling for years, and by some key measures, the world has never been more equal. Viewed from Asia, this is no surprise. Since 1980, rapid economic growth in the developing world has allowed more than one billion people, mostly from Asia, to escape poverty and to join the rapidly swelling global middle class.

This transformation is most visible in China. Today, the fastest growing segment of China’s population is the class deemed “affluent” – with an annual household income of more than 140,000 yuan (HK$163,000). That might not sound much in developed economy terms, but goods and services are much cheaper in China than in the rich West.

Come September, a world in crisis will look in vain to the G20 for leadership

Apply the World Bank’s adjustment for this difference in purchasing power, and today some 200 million Chinese enjoy an annual household income of US$40,000 or more, not far behind the median US household income of US$54,000.