Why is growing inequality important to China's economic prospects? A premise: Corrado Gini, a statistics professor who taught at Bocconi in the 1s, is remembered all over the world for his 'Gini coefficient', the measure most used to evaluate inequality in the distribution of income: it varies from 0,61 (maximum inequality) to zero (perfect equality). Well, in China, according to a very recent study by the China Household Finance Centre, China's Gini has reached XNUMX - above the average of other countries - and is growing compared to the past.
Even if a growth in inequality is physiological in the early stages of economic development, this trend is worrying because in China there are no democratic consensus mechanisms that guide the choices of rulers. However, the reduction of inequalities can only be at the top of the concerns of the new Chinese leadership: given that the degrees of political freedom are limited, it is better to ensure better economic conditions to mitigate the demand for democracy. And all of this can only be done by boosting domestic demand. This 'new frontier' of Chinese economic policy will help keep the growth rate high, and there is no shortage of means to do so: both budgetary and monetary policies still have room to become more expansive.
