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« James Fallows on the US-China Relationship | Main | Bureaucracy and Creativity: Cornerstones of Life in China »

January 08, 2009


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Daniel Shi

Great stuff Leslie, Hongqing!.

My thoughts on where microfinance fits into China's agenda:
I think microfinance can also be approached from a purely pragmatic view. I don't know what the list of the biggest headaches for the Chinese government is. But I'm willing to bet that somewhere in the top five is going to be:

- Social instability
- The widening income inequality
- Developing the Interior and Western regions

And I think microfinance will have a big role to play in all of this. The MFIs Wokai works with are opening up the door for the rural poor to get access to investments. The hope, I'd imagine, is that this will help alleviate the income gap. Furthermore, I'd imagine this would open the doors for new industries and enterprises to spring up in inland provinces like Qinghai or Inner Mongolia. The poorest places that need it the most.

And I think ultimately, that will be linked to issue of social stability. Based entirely on armchair analysis, we've been seeing a lot of "mass incidents" in China, and a lot of the times they are linked to inequality - inequality of wealth, inequality of rights, inequality of social standing, etc. Social instability blocks economic development, and that's the government's number 1 goal.

So Microfinance can be a strong policy tool as a part of soothing inequality and reducing instability for a more "harmonious society".

Leslie Forman

Great synthesis, Daniel! I like the way you've connected microfinance to China's overall stability. It reminds me of the video I posted here:

Keep up the good work and see you soon!

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