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China's Widening Income Gap: Report
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A Chinese Academy of Social Sciences (CASS) report indicates that China's income gap is showing no signs of narrowing despite government efforts to bridge it.

China's income disparity is close to that of Latin America's, says the CASS report based on surveying 7,140 households.

Growing at double-digit rates China's economy has become the world's fourth largest; however, it is still grappling with the disparity between the haves and have-nots. This has widened dramatically over the past 20 years.

The richest 10 percent of Chinese families now own more than 40 percent of all private assets while the poorest 10 percent share less than 2 percent of the total wealth.

In 2005 the average annual per capita income of urban residents in Beijing was 17,653 yuan (US$2,259.5) while people in Qinghai Province earned an average of only 8,057 yuan (US$1,031.3) a year, government statistics show.

The gap between urban and rural residents is even larger. Farmers in Qinghai reported an average annual per capita income of 2,165 yuan (US$277.1) in 2005. This is just 25 percent of what local urban residents earned.

Increasing medical costs have become the biggest burden facing Chinese people. The report shows that 11.8 percent of household expenditure goes on health care. This is higher than communications and education.

According to a recent survey jointly conducted by the China Youth Daily and sina.com.cn nearly 90 percent of Chinese people are alarmed by the gap between those who have and those who don't. 

Just over 80 percent said it was time to correct the imbalances while only 14.1 percent believed "there is no need to change." The government has made narrowing the income gap one of its top priorities and a cornerstone to building a harmonious society.

China's Gini Coefficient, an indicator of income disparity, has reached 0.496 according to the report carried by Elite Reference, a weekly newspaper run by the China Youth Daily. The Gini Coefficient uses zero to indicate equal income distribution while one represents the largest income disparity.

According to the World Bank the country's Gini Coefficient was 0.45 in 2005. The index in India is 0.33, the US 0.41 and Brazil 0.54.

(Xinhua News Agency January 8, 2007)

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