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Deeper income gap calls for reform to solve deeper conflict
(Xinhua)
Updated: 2008-09-12 21:40

Of the 2,528 yuan per capita cash income of farmers in the first half this year, an average of 785 yuan was earned by doing non-farming jobs, often as migrant workers in cities. 1,080 yuan per capita was gained from selling agricultural products, and 336 yuan from running businesses.

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The skyrocketing producer price index, the rising wages for migrant labor and the growth of subsidies are said to have contributed to the major rise in farmer income this year.

But the increase would be nibbled away as farming costs increased because of more expensive materials. Alternative sources of employment are also diminishing as many export-oriented factories shut down in coastal areas, which employed mainly migrant workers.

How to effectively boost farmer's income and narrow the urban-rural income gap triggered widespread discussion of deeper conflict in the economic and social development of Chinese society.

Yan Chengzhong, director of the Institute of Economic Development and Cooperation of Shanghai Donghua University, attributed the problem to the disparity of urban dwellers and rural residents not only in income, but also in areas of education, medical care and welfare.

Measures have been taken to improve infrastructure and rural production. In 2007 alone, the central government allocated 420 billion yuan from the treasury for rural development, a sum which almost equals aggregate government spending in rural areas from 1998 to 2003. The allocation in 2008 is said to be even higher.

But the central task should be the reform of the existing dualistic economic structure of cities and the countryside in the next round of development in China, said Li Yining, a well-known economist who had proposed the ongoing shareholding system reform in China.

Since 2007, the central government has initiated a pilot reform in two rural experiment zones in Chongqing and Chengdu, where the government explored ways to provide service in employment, education and social securities that equals those provided to urban dwellers.