Income gap among urbanites widens further

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Last updated at: (Beijing Time) Friday, November 07, 2003

Income gap among urbanites widens further

The income gap among Chinese urbanites continued to widen in the first nine months of this year, triggering fresh worries about a potential wealth polarization in the fast-developing economy.

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The income gap among Chinese urbanites continued to widen in the first nine months of this year, triggering fresh worries about a potential wealth polarization in the fast-developing economy.

The National Bureau of Statistics (NBS) announced a steady rise in disposable incomes for urbanites, with per capita income up 9.5 per cent over the previous year to 6,347 yuan (US$767.47) between January and September.

But the survey suggested that per capita income of top earners, who account for 20 per cent of the urban population, posted a year-on-year increase of 12.4 per cent to reach 13,120 yuan (US$1,586).

In contrast, per capita income of low-income urban residents, who also make up 20 per cent of the urbanites, edged up by a meagre 8.3 per cent year on year to 2,433 yuan (US$294.19).

The ratio between incomes for the high-income and low-income groups rose to 5.4:1 at the end of September from 5.2:1 of last year, the NBS said.

The NBS poll found that income disparity among city dwellers in different regions of China had also widened.

Per capita disposable income of urban residents in the highly-developed eastern region saw a year-on-year gain of 10.4 per cent to 7,764 yuan (US$938.81) while the figures in central and underdeveloped western regions jumped by 10.1 per cent and 7.2 per cent respectively to 5,234 yuan (US$632.88) and 5,285 yuan (US$639.05).

Economic researchers said the data highlighted the yawning wealth gap between rich and poor in China, which undermines social order and threatens sustainable economic growth.

An earlier report by the Institute of Economic Studies at the Chinese Academy of Social Sciences warned that income disparities would grow further unless the government introduced urgent measures to tackle the problem.

The study found that the Gini coefficient - an international measurement of income disparity - among Chinese urban residents has risen to 0.32 from only 0.16 in 1978; while the figure among rural residents reached 0.35 in 2000, compared with 0.21 in 1978.

The figure between urban and rural residents jumped from 0.389 in 1995 to 0.417 in 2000, above the international danger level of 0.4.

A zero Gini coefficient represents perfect equality and one indicates a complete monopoly of wealth by the privileged.

Professor Chen Wentong at the Central Party School said the most wealthy people in China include newly-rich private entrepreneurs and pop stars.

Meanwhile, the underprivileged group with low income consists of poverty-stricken jobless and laid-off urbanites and farmers.

The professor said soaring unemployment, caused by sweeping industrial restructuring and reform of State-owned enterprises, contributed to the growing income gap in cities.

Meanwhile, a number of factors "that go against narrowing the income gap" should also be blamed for the worsening problem, he added.

They include State monopoly of some profitable industries such as the banking and telecommunications, a poor social-security system and a flawed income-distribution policy.

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