Why China’s economic recovery from coronavirus is widening the wealth gap by Sun Yu and Yuan Yang published by Financial Times (8/2020).
A lack of support has left lower-income workers unable to spend even as richer households splash out
Amanda Wang’s family businesses — a call centre and two restaurants in Beijing — are grappling with a plunge in revenue following the coronavirus outbreak. She imposed a company-wide 30 per cent pay cut on about 120 workers in July even after receiving tax cuts and employment subsidies from the government designed to help companies survive the pandemic.
“My biggest challenge is a lack of business and policy support [from the government] isn’t helpful [on this],” says Ms Wang, referring to her decision to cut workers’ salaries. “I have to make savings where I can.”
Yet Ms Wang had no qualms about renewing her annual Rmb150,000 ($21,000) membership at a downtown beauty salon in the Chinese capital. “I am not going to cut corners on my basic needs,” says the 41-year-old, who in July sold one of her six apartments in Beijing for a profit of Rmb3m. “There are ways to make up for the income loss.”
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