When French economist Thomas Piketty published his book ‘Capital in the 21st Century’ in 2013, it made an overwhelming impression across the world and sparked several debates about modern capitalism and inequality.
The main argument of Piketty’s ‘Capital’ was that the rate of return on inherited wealth in an economy would always grow faster than the income one earns through compensated labour.
As right-wing commentators were angered by Piketty’s arguments, his book was acclaimed by Xi Jinping, the president of China. Moreover, Jinping used some of his research findings in a speech in 2015.
However, Piketty’s new book, ‘Capital and Ideology’, has been subjected to censorship in China.
The reason for the censorship is that it also analysed aspects relating to the growing inequality in China.
Piketty underlined the paradox between a socialist political system and a highly unequal society in China.
According to the data cited by Piketty in his new book, the share of China’s wealth held by the richest 10% of the population was about 40% to 50% in the early 1990’s, an inequality level below that of countries where social democratic policies are in force, such as Sweden. But by 2018, the percentage had risen to almost 70% – close to the figure for highly unequal societies like the United States of America (US).
Li Keqiang, the Premier of the State Council of the People’s Republic of China, stated in May that there were 600 million Chinese living on incomes of 1,000 yuan (US$145) or less a month. This triggered extensive debates over whether China is a ‘rich’ or ‘poor’ nation-state.
This figure, which Piketty shared in his book, was also later confirmed by China’s Statistics Bureau. It also followed a report by the Central Bank which stated that the bottom 20% of urban households held only 2.6% of the nation’s wealth.