It’s no wonder the media is obsessing over China. The numbers are staggering; last summer its GDP hit $1.415 trillion, passing that of former Asia leader Japan. From 1989 until 2010, it’s average quarterly GDP growth was a stunning 9.31 percent. The United States currently owes China $1.2 trillion dollars.

So, Chinese citizens must be thrilled, right? Corporations and our government are salivating at the prospect of millions of newly middle class consumers. The problem is, China is suffering from a problem that the United States knows too well: income inequality. Victor Shih, associate professor of political science at Northwestern University, breaks it down over at The Diplomat:

First, real urban disposable income rose a comparatively tepid 7.8 percent in 2010, despite economic growth of nearly 10 percent. However, urban retail sales of consumer goods grew 14.5 percent. While the growth of consumption is good for China’s economy, the pattern of this growth suggests rising inequality.

On top of that, the consumption categories with highest level of growth were luxury items like jewelry, furniture and cars, which rose 46, 37 and 34 percent, respectively. Shih takes this as an indicator that consumption is mainly being driven by the wealthy. Now, all of these statistics point to troubling trends, but none is really as jarring as this one: 32 percent of China’s college graduates were unable to find employment, while for many of the 68 percent who do find jobs “wages were often no better or sometimes even worse than those for migrant workers in factories.” Stories of “ant colonies,” communities of young, recently graduated professionals living in shared, tiny spaces (sometimes even up to 8 to a room), have become common in the media recently.

Now, don’t get me wrong; lots of people did enter the middle class in China. Even for those who didn’t, any rise in income is a welcome one, even if it requires taking a train across the entire country. The fact remains that the majority of China’s astronomic growth is benefiting relatively few, often those with the connections to gain lucrative government contracts. Shih notes that when you look at GDP per capita, other Asian countries like South Korea and Japan are way ahead of China. Earlier this year I pointed out that while everyone was talking about Japan’s decline and China’s rise, Japan’s citizens enjoyed a host of benefits like healthcare, low unemployment and extremely low income inequality that their Chinese counterparts did not.

The point of all of this is not to demean the accomplishments of China; the country certainly has taken the lead when it comes to alternative energy and other forward-thinking industries. It is to take a step back and:

1) Stop gushing about how we need to take a lesson from the Chinese economic playbook.

2) Not cut the Chinese government slack on its poor record on free speech and human rights.

As economist Tyler Cowen would say, China has picked lots of low-hanging fruit, educating millions and millions of smart young men and women who in previous generations wouldn’t have gone to college. The United States has been there, done that. Small government types certainly wouldn’t want to emulate the other part of China’s economic plan. As Shih says ” … lest we begin to think of China as a dynamic market economy, the latest data showed that of the 27.8 trillion yuan in fixed asset investment, 15 trillion was accounted for by investment undertaken by state-owned enterprises or investment in real estate.” While the state’s power is good for coordinating and focusing economic energy, it also has a dark side, namely that the state can essentially confiscate anybody’s land in the name of economic development. Not to mention that China’s zeal for exports has had a cost on its workers, like the 15 who committed suicide at electronics manufacturer Foxconn last year.

Despite its growth, you’d be hard-pressed to find someone who wouldn’t rather be an average citizen in South Korea or Japan than of China. We can’t simply look at big, bold numbers like GDP and think they tell the whole story. Overall growth doesn’t always translate into a high standard of living, human rights and a sustainable economy.

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