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| Income Gap of China Is Widening Alarmingly |
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 Despite rapid economical development of China in the past few years, China is suffering a bigger and bigger disparity between its rural and urban areas, and the increasing income gap has become one of the most important social concerns that have attracted a lot of public attentions. Nearly 90 percent of Chinese people think that the wealth gap between the haves and the have-nots has currently widened to an alarming degree, according to a recent survey jointly conducted by the China Youth Daily and Sina.com.cn.
Statistical Facts of the Income Gap of China in Recent Years
According to a survey, in 2002, the top one percent of people with the highest income owned 6.1 percent of the total income of the society, 0.5 percentage points higher than 1995. The top five percent of people with the highest income have nearly 20 percent of the total income of the society, 1.1 percentage points higher than 1995. The top 10 percent of people with highest income have 32 percent of the total income of the society, 1.2 percentage points higher than 1995.
In the following year, the United Nations Development Program released statistics show that the Gini coefficient, a statistical measure of inequality in which zero expresses complete equality while one expresses complete inequality, has reached 0.45 in China; 20 percent of China's population at the poverty end accounts for only 4.7 percent of the total income or consumption; 20 percent of China's population at the affluence end accounts for 50 percent of the total income or consumption.
However, statistics from the World Bank show that China's Gini Coefficient, the leading measure of income inequality, surged from0.29 in 1981 to 0.47 in 2006, exceeding the internationally recognized alarm level of 0.40.
Also in 2006, 0fficial figures show per capita income in urban and rural areas was 10,493 yuan (about 1,312 U.S. dollars) and 3,255 yuan (about 407 U.S. dollars) respectively last year, meaning the gap between them has grown from 4,493 yuan in 2001 to 7,238 yuan now. 10% of the richest population in China own 45% of the national wealth, while 10% of the poorest, only 1.4% of the total social wealth.
The reasons behind the growingly widening income gap:
The growing wealth gap is a byproduct of China's economic and social development. Since China started its reform and opening-up policy in the late 1970s, its economy has grown at a rapid rate and emerged as the fourth largest in the world.
Jia Kang, director of the Fiscal Science Institute under the Ministry of Finance, has listed several reasons for the growing wealth gap, including individual effort and talent, opportunities, unfairness caused by existing systems such as monopolies in certain sectors, hidden rules granting privileges to the few and extra incomes derived from corruption.
"Biased policies against farmers and heavy taxation were two major reasons causing the great disparity," said Zhang Chengfu, deputy dean of the School of Public Administration of People's University of China.
The article in the newspaper, run by the Party School of the Communist Party of China Central Committee, says the rich population consisted of private business owners got rich due to their talent and diligence, but those who gained wealth through collusion with officials in power-for-money deals or because they happen to work in monopoly companies or because they stole state assets.
The reasons mentioned above are serious matters. If they continue this way for a long time, the phenomenon may shake the public's confidence in China's economic development and reform and opening-up policy, and give rise to various sorts of social instability.
Some Measures Taken by the Chinese Government to Tackle the Issue
In face of the growing income gap in China, the government has paid serious attentions to the issue of great public concern. And some measures have been put into place. For instance, Premier Wen Jiabao called for advocating and implementing a scientific concept of development, urging coordinated development between rural and urban areas as well as between western and eastern areas. Over the past few years, the government has taken a series of measures to limit the widening wealth gap, including eradicating agriculture taxes collected from farmers, providing subsidies to grain producers, and increasing the minimum wage to benefit millions of migrant workers.
Data from the Ministry of Finance show that the central government spent more than 1.1 trillion yuan from 2003 to 2006 on agriculture and farmers, with an average year-on-year increase of 15.6 percent. According to the 11th five-year (2006-2010) plan, China will channel more money into the construction of infrastructure in rural areas.
Some analysts argue that the government should encourage those who get rich legally, crack down on those who get fat on illegal money and rectify system flaws that distort income distribution. |
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