China rural wealth gap near danger level: report

DISCONTENT::The gap is widening as rural residents who work as migrant laborers in cities earn twice as much as those who farm for a living, the report says


Thu, Aug 23, 2012 - Page 6

China’s rural inequality is nearing “danger” levels as hundreds of millions of people shun farming for better paid city work, causing a widening wealth gap, a report said yesterday.

The state-linked Center for Chinese Rural Studies said inequality within rural areas was growing given the difference in incomes between those who farmed and those who flocked to cities as migrant workers.

Although the majority of migrant workers live in cities for most of the year, they are officially registered as rural residents.

“The difference in rural residents’ income is getting bigger and pressure on living expenses is increasing,” Xinhua news agency reported the center as saying.

China’s growing wealth gap is a major concern for authorities keen to avoid public discontent that could lead to social unrest in the rapidly developing country of 1.3 billion people.

The center estimated the Gini coefficient — a commonly used measure of inequality — was 0.3949 for rural residents last year, nearing what it called the “danger” level of 0.40, the statement said.

The Gini coefficient measure varies between 0, reflecting complete equality, and 1, which indicates complete inequality.

The release marked the first time the center had compiled an estimate, so no comparative figure was available.

China has not released a Gini coefficient for the country as a whole for more than a decade, putting the figure at 0.412 in 2000, amid worries over the widening income gap.

An official said in January that data on high income groups was incomplete to explain why the government had again failed to issue the statistic for last year.

Rural residents who work as migrant laborers in cities earn twice as much as those who farm for a living, Xinhua news agency quoted the center as saying, but gave no figures.

As a result, incomes as a whole for rural households were rising sharply, with average cash income jumping more than 14 percent to about 38,894 yuan (US$6,174) last year, Xinhua said.

Deng Dacai (鄧大才), deputy head of the center, said the Gini coefficient for all of China was likely “well above” 0.40, Xinhua reported. The authors of the study could not be reached for comment yesterday.

The government-backed Chinese Academy of Social Sciences estimated China’s Gini coefficient at nearly 0.47 in 2005.

“China should already have the statistical foundation to issue the nationwide Gini coefficient,” said Wang Jianmao (王建鉚), an economics professor at the China Europe International Business School in Shanghai. “The key is whether it’s willing to issue it.”

The UN Industrial Development Organization, referring to the 0.47 level and lagging rural incomes, has said: “At this level of disparity, many would argue that China is in danger of serious social instability.”