China's rural wealth gap near 'danger' level - study

Posted at 08/22/12 2:23 PM

SHANGHAI - China's countryside is facing a widening wealth gap as hundreds of millions of residents abandon farming for better paid work in cities, a report said, warning rural inequality was approaching "danger" levels.

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

"The difference in rural residents' income is getting bigger and pressure on living expenses is increasing," the centre said in a statement reported in state media on Wednesday.

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 centre, which has links to the state, estimated the Gini coefficient, a 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 commonly used Gini coefficient measure varies between 0 -- reflecting complete equality -- and 1, which indicates complete inequality.

China has not released a Gini coefficient for the country as a whole for more than a decade, 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 2011.

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

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

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

Deng Dacai, deputy head of the centre, said the Gini coefficient for all of China was likely "well above" 0.40, Xinhua reported.

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

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