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Urban-Rural Income Gap Larger: Survey

Despite the robust growth of its economy, China is suffering a bigger and bigger disparity between rural and urban areas.

A survey conducted by the Economic Research Institute of the Chinese Academy of Social Sciences shows that the income gap between rural and urban residents has kept growing in the past five years, and China has become one of the countries with the largest urban-rural gap in the world.

A report based on the nationwide survey shows that the average income per capita of urban residents was 3.1 times that of farmers in 2002, much higher than 2.8 in 1995.

However, even this does not tell the real disparity between urban and rural citizens, said Li Shi, a researcher of the institute who is in charge of the survey.

The income of urban citizens concerned does not count the welfare they have access to, including medical care, unemployment insurance and minimum living relief.

Most farmers have no access to these. What's more, they have to pay the educational cost themselves while the central government covers most of such costs for urban residents.

With all these factors concerned, the urban residents' income should be four, five or even six times of that of the rural residents, said Li Shi.

According to the 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.

Social disparity also grew as fewer people own more social wealth and rural residents were the group of people being left behind, said Li.

According to the survey, urban-rural disparity contributes to 43 percent of the social disparity as a whole, which means 43 percent of the social disparity comes from urban-rural disparity. The income disparity between urban and rural areas has become very big, said Li.

Meanwhile, the urban-rural disparity is most serious in backward western areas and relatively small in developed eastern areas.

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 imbalanced development has aroused attention from the central government. Premier Wen Jiabao last week 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.

In the newly-released report, researchers suggest the government make policies favorable to rural development aiming to reduce the urban-rural disparity.

The government should push forward its tax-reduction campaign in rural areas, which started in 1994, said Li Shi. Analysis in the report shows that farmers' average income per capita would increase by 5.4 percent if they were exempt from taxes, which means their income would be much closer to their urban counterparts.

The report proposes the central government should be responsible for educational and medical costs in rural areas. Besides, it is necessary to establish a better social security system in a bid to reduce the disparity between rural and urban areas.

Researchers also suggest formation of an integrated labor market to give farmers equal rights with urban residents in employment and income as more and more farmers rush to cities to make a living.

(Xinhua News Agency February 25, 2004)

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