HONG KONG (Reuters Breakingviews) - It has been a poor showing from China for its impoverished masses. Some cities started letting noodle and knick-knack stalls back onto roadsides in recent weeks after Premier Li Keqiang endorsed the worthwhile stimulus initiative, but it is already being rolled back after attacks by state media. The pushback suggests rich urbanites in power prefer to eliminate the appearance of poverty than resolving it.
In a speech to China’s parliament last month, Li noted that 600 million citizens live on salaries of 1,000 yuan ($141) a month and said reviving the “stall economy” could help. Many of Li’s previous ideas have been undercut by the central government, most famously the Shanghai Free Trade Zone. This swift and public rejection by state media of an idea from a premier – a role ordinarily charged with pushing economic reform before Xi Jinping became president – reveals deep official resistance to reduce the wealth gap, despite a promise to eliminate poverty by the end of this year.
In the days before e-commerce, much of China shopped and dined at wheeled outdoor malls made of carts selling roast yams, socks, DVDs and fighting crickets. Over the last decade, however, most municipal authorities shut them down. Manned by rural migrants, they evaded taxes and competed with brick-and-mortar stores. Food trucks were particularly troublesome; many left waste on the streets, attracting rats, and used recycled “gutter oil” to fry noodles. None fit in with a clean, modern, “moderately prosperous society” Xi wants to project to foreigners.
What that informal system did, however, was generate income for low-skilled people. Li’s idea is worth a try, especially given the estimates that one-fifth of China’s population might be out of work. Many of them are from the restaurant sector. But with state television railing against the idea, municipalities that lifted the curbs are sure to restore them quickly. That implies Beijing will tolerate inequality so long as poor people are prevented from soiling China’s image. That bodes ill for other poverty relief initiatives, and for moderate prosperity too.
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