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Wealth gap threatens social stability

A yawning gap between rich and poor in China is seriously threatening social stability, the UN said in a report yesterday, urging the government to address the problem.

The China Human Development Report 2005 has documented how hundreds of millions of rural inhabitants and migrant workers have been left behind by 25 years of booming economic growth.

"High income inequality leads to a sense of social inequity, which unemployment and corruption aggravate," the report said. "All these are major factors in the deteriorating of social stability."

Growing income inequalities not only divide rural and urban dwellers, but also separate the rich and poor in the cities, said the report, published by the UN Developmental Program (UNDP) and written by Chinese researchers.

China's opening up and reform policies, which started a quarter century ago, have succeeded in raising the nation to 85th place among 177 nations in the UN's 2003 Human Development Index (HDI).

But "the widening income disparities are perhaps the most dramatic manifestation of inequity in China," the report said.

The index measures income, education level and the life hopes of individuals surveyed.

Income inequality was the foremost issue driving social dissatisfaction in China, the report said.

It cited a December 2002 survey taken by the Beijing Social Psychological Research Institute that showed that 80 percent of respondents believed that widening income inequality was "a major social problem."

In 2003, the income of a family's main wage earner in urban China was three times higher than a rural wage earner, the report said, while adding that that number was probably an underestimate and closer to four times bigger.

The most vulnerable groups were poor rural residents, urban workers laid off from state-owned enterprises and an army of migrant workers that were estimated to be as many as 140 million people last year, it said.

Migrant workers were likely to be underpaid and not covered by social security and health plans.

Laid-off urban workers were entitled to scant unemployment compensation and the rural poor were continually hounded by local governments for taxes, it said.

The study documented central government efforts to bridge the widening social divisions, including pilot programs to improve access to social security and public service programs. The report noted the political pledge by the Chinese Communist Party to build a "harmonious society," as a major effort in China's five-year developmental plan that begins next year.

The authors of the report called on the government to improve rural infrastructure, especially in areas of public services, and to completely abandon the country's draconian hukou residential registration system which has long been seen as a barrier to the free flow of labor.

The system has been undergoing reform in some cities, but is a particular obstacle to migrant workers without a residential permit who are excluded from social security benefits as well as public services such as schools.
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