Author | Editor: Kuznar, E. (NSI, Inc.)
Two datasets on wealth and status distribution in China were analyzed: 2012 World Bank quintile and decile estimates of income, and 2011 net wealth centiles compiled by the Chinese government’s Household Finance Survey.
Both datasets show that China’s population is risk acceptant. The data provided by the World Bank not only show a population that is on average risk acceptant, but also demonstrate that the entire population is risk acceptant with the wealthy exhibiting the greatest risk acceptance.
Significance for Risk Taking and Stability
While China’s ethnic makeup is 91% Han, the remaining 8% number more than 100 million Chinese citizens that belong to 55 ethnic minorities, many of whom reside in China’s outer provinces and consider their particular ethnic groups autonomous from China (Clarke, 2017). The highly restrictive and autocratic practices of the Chinese Communist Party (CCP) experienced by these minority groups creates the potential for further civil strife throughout the country. Examples of ethnic repression as domestic policy are the CCP’s preemptive limiting of the Uighur population’s freedom and imposing military control over Tibet (Clark, 2017; Maizland, 2019). Beijing’s growing repressive civil policies for Chinese citizens and targeted persecution toward its minorities, combined with China’s highly risk acceptant population has the potential to spark widespread civil unrest and instability.
Implications for US Interests
The US has a competitive relationship with China that occasionally turns into necessary collaboration, as both economies are interdependent and are heavily reliant on each other for success (Egan, 2019). Politically, the US has concerns with China’s intrusion into US international interests and influence (Hass & Rapp-Hooper, 2019). This makes the risk acceptant nature of China’s population and the present ethnic fissures an opportunity for the US to influence its competitor from the inside. Current unrest in Hong Kong1—where per capita GDP is approximately five times higher than the rest of China—may be an example of this potential, as China’s most risk acceptant societal elements, who are therefore more likely to protest government policies, are at the high end of the income scale.
Implications for China’s Interests
The risk acceptance of China’s population threatens its national and international interests from within. The CCP views the ethnic fissures and perceived separatist mentality of its minority groups as a direct threat to its regime stability and China’s outward BRI projects, which must go through some of these provinces (Clarke, 2017). Furthermore, inequality could fuel protest even at the higher end of the economic scale. However, risk taking can be done in pro-social ways, such as business investment and start-up businesses. If the CCP can re-start the Chinese economy and provide growth and opportunity, this potential liability could be turned into an asset.
Implications for Russia’s Interests
Russia relies deeply on its cooperative activities with China, including interacting with countries in foreign regions with the expressed purpose of weakening Western democratic values and US political influence (Oliker, 2016; Gurganus, 2018). Given its strong political and economic ties to China, Russia may stand to lose economic and geopolitical power in certain regions including South Asia and the Asia Pacific if the CCP’s legitimacy is weakened by inner turmoil from its repressed and risk acceptant population.