China
June 19, 2005
Income gap in China widens in first quarter
China's income gap widened in the first quarter of the year, with 10 percent of the nation's richest people enjoying 45 percent of the country's wealth, reports said.
China's poorest 10 percent had only 1.4 percent of the nation's wealth, the Xinhua news agency reported, citing a recent survey by the National Bureau of Statistics.
The income gap has become increasingly worrisome for the government of once-egalitarian China, especially as low- and middle-income earners are increasingly quick to accuse officials of pilfering state assets in the country's dash toward market capitalism.
"There are two gaps that need to be addressed," Li Xiaoxi, head of the economic and resource management institute of Beijing Normal University, was quoted as saying. "The first is the very wide gap between different social groups. The other is the astonishing economic development gap between regions."
Li added: "Presently our thinking is that we must attack those who are getting rich through illegal means, do everything we can to improve employment channels and control the trend towards an ever-widening gap."
The survey, which polled 54,000 urban and rural households, found China's richest 10 percent had disposable income 11.8 times greater than the lowest 10 percent at the end of the first quarter of 2005.
This compares with the rich having disposable income 10.9 times greater than the poorest 10 percent during the same period last year, the report said.
However, income continued to grow among both the rich and the poor during the first quarter of 2005. The richest 10 percent saw disposable income rise 15.7 percent over the same period last year to 8,880 yuan (1,072 dollars), it said.
Disposable income for the lowest 10 percent rose 7.6 percent from the first quarter of 2004 to 755 yuan.
Disposable income in China grew by 11.3 percent on average during the period, but only 8.6 percent when inflation was factored in, while a notable disparity between urban and rural incomes also widened, it said.
Zhou Xiaochuan, governor of the People's Bank of China, China's central bank, said efforts at facilitating urbanization and setting up a social security system were keys to narrowing the income gap, Xinhua said.
In order to build a modern "well off" society, China hopes to attain an urbanization rate of 50 percent by 2020, which means finding jobs and living space in cities for hundreds of millions of people.
"The income gap issue will not become smaller in the next 10 years, but probably will increasingly widen," Fan Gang, a leading economist at the National Economic Research Institute of China told Xinhua.
"When discussing the issue of income distribution, the thing that everyone hates most is corruption, this is unfair."
Fan, however, maintained that at China's developmental stage an income gap was to be expected with or without corruption.
Still, China's Gini coefficient -- an internationally accepted measurement of income equality -- was calculated to be over the "alarm level" of 0.4, the report said.
On the Gini scale, zero corresponds to complete equality and one refers to perfect inequality, or one person having all the income.
No precise Gini coefficient was provided, but state press reports in recent weeks said the value was more than 0.48 and approaching 0.5.
Most developed European nations tend to have coefficients of between 0.24 and 0.36, while the United States has been above 0.4 for several decades, according to the United Nations 2004 Human Development Report, which calculated China's value last year at 0.447.
Source: Xinhua/agencies
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