Deeper income gap calls for reform to solve deeper conflict

(Xinhua)
Updated: 2008-09-12 21:40

BEIJING - A recent special report of the Chinese State Council raised a pair of paradoxical figures that reflected one of the most difficult problems of the Chinese economy.

According to the report to the Standing Committee of the National People's Congress, the per-capita disposable income gained 9.5 percent to 4,140 yuan (about US$608.8) in real term in 2007 in the countryside, the largest annual growth since 1985.

But the largest growth is not accompanied by a smaller urban-rural income gap. During the same time, the average city dwellers received an income that was 3.33 times larger than rural residents. The income disparity amounted to 9,646 yuan, marking the largest income gap since the reform and opening up of China in 1978.

The income ratio, a gauge of balanced social development, has been enlarging since 1985, when the income growth of rural residents slowed down as the focus of reform moves from countryside to cities. Though rural income growth once hit 9 percent in 1996, it was gradually reduced to 2.1 percent in 2000.

After government took major stimulative policies, including tax reduction, in the following years, the income growth of rural residents recovered to a higher level. For four consecutive years from 2004 to 2007, farmers saw a more-than-300-yuan increase in annual income, which means an increase of more than 6 percent.

However, despite the improvement in farmer's disposable income, the urban and rural income gap has continued expanding in recent years. According to the National Bureau of Statistics (NBS), the income ratio was 2.57:1 in 1978, and was reduced to 1.80:1 before it grew to 3.33:1 in 2007.

Minister of Agriculture Sun Zhengcai has called for more technological and financial support for the rest of the year to help farmers increase their incomes.

Though farmers' income rose at a rapid pace, the foundation for their income growth remained weak, and the channels for farmers to make money is limited, said Sun, calling for the establishment of a long-term mechanism to boost rural income.

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