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China's urban, rural income gap widens

Updated: 2010-01-22 09:26
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Signs of expansion of the income gap between China's urban and rural residents emerged Thursday amid the official data showing otherwise strong economic growth.

The per-capita disposable income of urban people was 17,175 yuan ($2,514.6) in 2009, up 8.8 percent from a year earlier, said Ma Jiantang, director of the National Bureau of Statistics (NBS).

Per-capita disposable income of rural residents stood at 5,153 yuan last year, and the growth rate was 0.6 percentage points lower than that of urban residents.

The income ratio between urban and rural residents was 3.33:1, which meant city dwellers' average incomes were 3.33 times greater than the average for farmers. In 2008, the ratio was 3.31:1, Ma said.

In comparison, the income ratio was 2.56:1 in 1978 when city dwellers' average incomes stood at 343 yuan while that of farmers was 134 yuan.

After China introduced the household contract responsibility system to countryside in 1978, rural residents at first saw their incomes grow faster. As a result, the income ratio was reduced to its narrowest at 1.82:1 in 1983, when urban residents' average incomes were 564 yuan, 254 yuan more than those for farmers.

Official figures showed that the income ratio, a gauge of balanced social development, has been widening since 1985, when the income growth of rural residents slowed as the focus of reform moved to the cities.

A survey last month of 50 leading Chinese economists showed the excessively wide income gap was the major problem that could affect healthy development of China's economy.

In the survey conducted by the Economy and Nation Weekly magazine, 34 out of the 50 respondents considered the income gap the top threat to China's future development.

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Other problems included weak consumption demand, potential inflation as a result of a credit boom in 2009, lack of a social security network and financing difficulties among small and medium-sized enterprises.

Incomes of rural people working outside their hometowns accounted for 40 percent of their per-capita disposable income, and the sale of agricultural produce 49 percent.

"The government will put more effort into increasing farmers' incomes, focusing on the two parts," said Ma.

The government should help improve the skills and abilities of rural workers and moderately raise agricultural produce prices after considering the welfare of both urban consumers and farmers, he said.