this post was submitted on 08 Jun 2026
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That's useful and when you take those data points maybe there's something more fundamental I'm missing based on the way I'm looking at the issue. I come at these issues with a western economics lens and it's easy to imagine I'm missing something about the way they structure their economy and handle income redistribution more broadly.
It sounds like what we've seen is a massive PPP improvement across the board, and specifically for the bottom 20%. That's obviously a good sign that they're moving more towards the "olive shaped" income distribution they're targeting.
Do you know a good source for details about the way China handles the federal vs provincial vs local funding issues? I'm having trouble trying to find good english language sources and I'd like to learn more about how they handle taxes and grants and what that looks like mechanically.
This world bank paper provides a detailed breakdown of standard expenditures and revenue calculations https://documents1.worldbank.org/curated/en/891221468236962204/pdf/415790CN.pdf
That said, I think the key part isn't in taxation actually but the fact that the state holds the commanding heights of the economy. https://www.piie.com/research/piie-charts/2024/chinas-private-sector-has-lost-ground-state-sector-has-gained-share-among
The key difference is that in the west the purpose of work is to create profit for people who own capital. Any social value produced as the result of work is strictly incidental. Hence, public sector relies on taxation to provide the necessities of life. The dynamic in China is fundamentally different because it is a planned economy. State owned enterprises are the main drivers of development, and private sector exists within the framework of five year plans. The party also controls the golden share of all the major private companies having members on the board. And that's the main factor responsible for ensuring that work by and large has a productive quality to it. People in a socialist state work in their own interest, they build infrastructure, develop technology, grow food, etc., for their own benefit. Profit of the capital owning class is not the primary driver of economic development.
Thank you for taking the time to patiently explain so much of this to me. I’ve got a lot to read and think about!
O7