Interesting Global News

Cross posted from: https://beehaw.org/post/18185844

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• Analysis of two nationally representative surveys in China from 1995 to 2017 reveals that wealth (assets minus liabilities) of households with at least one CCP member is 21–24% higher than similar households without CCP [Chinese Communist Party] members.
• The CCP wealth premium is explained in part by preferential access for CCP households to more valuable housing at lower prices compared to similar non-CCP households during the early years of housing privatization.
• The most recent survey (2013–2017) reveals the wealth of CCP households grew faster than similar non-CCP households, especially among the wealthiest 5%, driven primarily by higher levels of capital gains.
• For all wealth levels, CCP membership was a stronger predictor of wealth growth than level of education.

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Privately owned real estate today accounts for 84% of the gross total wealth across urban households — by far the largest component of private wealth. In the 1970s, however, virtually all urban housing stock in China was publicly owned.

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CCP households were less likely to self-build houses and more likely to either inherit or purchase homes through preferential policies, while non-CCP households invested more in self-built housing — typically the least profitable form of housing investment, especially for those at the lower end of the wealth spectrum. As a result, CCP households were better positioned to acquire high-value homes at lower prices, amplifying wealth disparities over time.

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The findings underscore the enduring wealth advantages CCP households enjoy compared to similar non-CCP households up and down the wealth distribution. The mechanisms identified in this research include preferential access to housing in the early phases of urban real estate privatization and faster wealth accumulation through capital gains in recent years.