Huge Chinese mattress hides $US1.4 trillion…

There is no political, social, educational or philosophical quick-fix for human nature. Figures showing the growing gap between the rich and poor in so-called communist China highlight this once again.

Despite decades of communist indoctrination and more recently, greater freedoms and openness to world markets, the Chinese people still like to keep money under their mattress so they can spend it on ‘things’.

And like anything in China, or India for that matter, that’s one big mattress.

A study conducted for Credit Suisse Group shows that China’s households hide as much as 9.3 trillion yuan ($US1.4 trillion) of income not reported in official figures – 80 per cent of it by the nation’s wealthiest.

One reason economists believe this figure is because the strongest area of economic demand in China right now is the domestic purchase of consumer items from designer handbags to flat screen televisions.

Taking the mattress cash figure into account, it turns out the average urban disposable household income is 32,154 yuan, or 90 per cent more than official figures. The bad news is that this means China’s rich-poor gap is most likely much bigger than realised.

The Gini coefficient is a single statistic used by economists to summarise the distribution of income across the population.Read More »