Cake theory
Cake theory
- Cake theory** () is a metaphor about economic development and the redistribution of wealth in the political discourse of China. It emerged in 2010 as problems with an increased wealth gap became gradually more apparent. If economic development is seen as analogous to baking a cake, one side of the debate suggests that development should focus on "dividing the cake more fairly ([[fair-cake-cutting]])", while the other says development should be focused on "baking a bigger cake (growing the pie)".
Synopsis Thirty years of economic growth in China has resulted in higher standards of living and a substantial growth in national income, but also led to a widening wealth gap and associated social problems. Conflicts are emerging between the haves and have-nots of society. The nouveau riche are seen as variously the beneficiaries of their hard work and enterprising character under the new market economy, or as cheaters of the system and inheritors of unfair privilege. At the third session of the 11th National People's Congress, then-Premier Wen Jiabao remarked that "we must develop our economy to make the cake that is prosperity bigger, but also use a reasonable system to distribute the cake fairly." On one side, orthodox communists suggest that the solution is to focus on distributing the wealth while pursuing higher growth ("dividing the cake"), while reformers and liberals suggest that the solution is to pursue continued growth and worry about dividing the wealth once the material wealth threshold is reached ("baking a bigger cake"). Wang said that "continued economic development" must take precedence over all other tasks.
The egalitarian "divide-the-cake" approach was an important component of the Chongqing model advanced by politician Bo Xilai. Bo gave residency status to numerous migrant workers in the city, so that they could enjoy the same rights and privileges given to urban residents, such as health care and education. and greater rule of law. While pursuing a more market oriented economy where the external market and private sector play key roles.
The metaphor is said to be emblematic of the ideological struggles within the top echelons of China's leadership. It asks the central question of whether further growth or fair distribution should be at the centerpiece of China's political agenda.