Urban rich-poor gap at alarming levels
Updated: 2006-02-06 19:21
The gap between rich and poor in China's cities
has reached alarming levels, the main economic planning agency says in the
latest high-level warning of the inequalities spawned by breakneck growth.
The National Development and Reform Commission (NDRC), issuing the results of
a study on income inequality among urban residents, said the wealth gap in
China's cities was now "unreasonable," the official Xinhua news agency reported.
The poorest fifth of urban residents received only 2.75 percent of total
income in urban areas, whereas the richest fifth commanded 20 times as much,
The agency's alarm underlines the fact that the rich-poor gap, long a source
of concern for policy makers worried about maintaining social stability, is much
more than a town-country divide.
The government's new five-year plan, due to be approved by the legislature in
March, stresses the importance of creating a more equal society. But official
comments have tended to focus on the income gap between cities and the
The NDRC said the country's overall Gini Coefficient, a measure of inequality
in which a value of zero represents perfect equality and reading of one means
perfect inequality, stood at around 0.4, the value generally considered to
represent alarming levels of inequality.
It said inequality was steadily growing, and that the Gini Coefficient could
actually be higher, as some income from high-income groups goes unreported,
according to Xinhua.
The World Bank estimates it at 0.45.
The NDRC attributed the growing urban income gap to differing pay scales
among industries, inequality between employers and employees and increasing
numbers of people with second incomes.
Xinhua cited unnamed NDRC officials as saying the government would use
tougher measures in coming years to promote equality. It did not specify what
those would be.
Premier Wen Jiabao said recently the government would seek to improve medical
care and social welfare, which have provoked rising complaints from Chinese
Beijing has already doubled individual income tax thresholds and scrapped the
centuries-old farm tax to try to ease the burden on the country's poor, but
officials say more needs to be done.