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Action needed now to confront wealth gap
(China Daily)
Updated: 2005-01-11 08:46
The widening wealth gap identified by the Beijing Municipal Bureau of
Statistics in a recent report underscores an immense challenge facing not only
the capital, but the country as a whole.
In the report on the capital's social progress, the disposable income gap
between the richest group and that at the bottom of the social ladder was found
to have increased from 3.1:1 in 2000 to 4.7:1 in 2003.
This growing disparity has occurred as the city strode towards building
itself into a world-class metropolis with double-digit economic growth.
Striking as it is, Beijing's example presents a microcosm of what is going on
across the country.
While China continues to amaze the outside world with its stories of rapid
growth, the country's Gini Co-efficient a standard measure of income inequality
has been gaining altitude at a speed similarly shocking.
Though researchers remain divided on the exact figure the country's Gini
Co-efficient stands at, most of them are agreed it has already exceeded the 0.40
threshold internationally viewed as a cause for concern.
An expanding economy has delivered a better life to most Chinese people since
the country initiated reforms and opened to the outside world a quarter of a
century ago.
China has lifted hundreds of millions of people out of absolute poverty
during this period, making itself an inspiring example in the global campaign to
fight poverty.
But, as the country's market-orientated reforms further deepened in recent
years, the benefits of robust economic growth have not been shared by all in
society. Wealth is, to some extent, disproportionately distributed. There is a
yawning income gap within and between urban and rural areas.
Increasing media reports have highlighted an emerging group of urban poor,
struggling to survive in booming Chinese cities. Their predicament certainly
justifies more concerted efforts on the part of government.
Yet, the more critical problem that will confine the long-term development of
the national economy, as well as our society, remains the rural-urban income
gap.
In 2003, the nationwide per capita disposable income of city dwellers was
8,472 yuan (US$1,024) while for farmers it was only 2,622 yuan (US$317).
Even though the past year of 2004 appears a good one for the country's some
800 million farmers thanks to a substantial recovery in grain prices, it is
still too early to claim that a turning point has come in narrowing the income
gap between rural and urban areas.
But the relatively fattened pockets of the farmers bear out the necessity of
continuing government support in the war against poverty. Strong policies and
financial support on the part of China's authorities was a great boon to
farmers' income growth last year.
The market has proved its capacity in promoting efficiency during the
country's ongoing transformation from central planning to market competition.
However, economic growth, by itself, will not address the problem of
inequality.
To allow social development to take root and economic growth to be
sustainable, China needs to squarely confront social and economic hurdles.
By boosting economic growth, the country has made remarkable achievements in
the fight against absolute poverty in the past two decades.
That growing income inequity is a by-product of fast growth should not be
tolerated.
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