The rich get richer—in Guangdong

By Mary Kwang, The Straits Times, 18 November 2000

The affluence in the province has made its people so self-reliant that many of them do not even need bank loans to buy or renovate their homes

GUANGZHOU— There are the rich in China. And then there are the richer ones in Guangdong.

China's most prosperous province has bred a group of affluent residents in the Pearl River Delta whose annual household incomes are more than three times that of an ordinary home in the province.

While savings of 100,000 yuan (S$21,000) in a bank is considered an astronomical sum in many parts of China, several residents in Guangzhou regard people with such savings merely as members of the middle class.

A Guangdong Publicity Department official told reporters that many residents in the delta could afford to buy and renovate their own homes without needing to borrow from the bank.

Among my colleagues, I have not heard of anyone who has taken up a housing loan, he said.

Purchase and renovation of an average apartment costs more than 100,000 yuan, he said.

One local businessman told this reporter that he had put down cash of three million yuan when he bought his 158-sq-m apartment two years ago in a Shenzhen complex which boasts gleaming marble, a clubhouse, swimming pool and valet-cum-housekeeping services.

Many of the affluent take up personal and property insurance cover, with a number even venturing into Hongkong to buy insurance policies because they have no confidence in Chinese insurers, he said.

Results of a recent survey published in the Yangcheng Evening News show that wealth distribution pattern is extremely skewed.

It estimates that less than 5 per cent of Guangdong households own at least 80 per cent of total investment assets in the province, such as stocks and property.

Income distribution in the province is very uneven between the rich south, closest to Hongkong, and the rural north and west. Districts such as Shaoguan and Deqing are pockets of poverty. The staple food of residents in these poor regions is corn, because rice is too expensive for them.

The provincial authorities organise regular assistance exercises, in which residents in the richer areas are asked to donate clothes, bedding and food to the less privileged.

Income disparity exists in urban areas too. Within Guangzhou itself, there are periodic appeals in the media for the fortunate to lend a hand to the families of laid-off state-owned enterprise (SOE) workers.

China's state-sector reforms in the past three years have resulted in the retrenchment of thousands of workers from SOEs in Guangzhou and surrounding areas in such sectors as textiles, chemicals and fertilisers and shipbuilding.

Guangdong's state-sector problems are less acute than those in north-eastern China and have also received less of the spotlight.

One reason for this is that Guangdong people aver politics.

Rather than take to the streets to demand jobs or retrenchment benefits, laid-off Guangdong workers tend quietly to seek other avenues to eke out a living.

They would become small-time vendors, domestic help and odd-job workers.

Attributes of a rich man in Guangzhou

A PROFILE of the rich people in Guangzhou, according to a recent survey whose results were published in the Yangcheng Evening News: