Report: China suffers widening income gap
www.chinaview.cn 2007-01-07 17:11:09

BEIJING, Jan. 7 (Xinhua) -- A report by the Chinese Academy of Social Sciences (CASS) shows that China's worrisome 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 which investigated 7,140 households.

Growing at double-digit rates China's economy has become the world's fourth largest, yet it is grappling with the disparity between the haves and have-nots, which 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 two percent of the total wealth.

In 2005, the average annual per-capita income of urban residents in Beijing was 17,653 yuan (2,263 U.S. dollars) while people in China's Qinghai Province earned an average of only 8,057 yuan (1,033 U.S. dollars) 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 (277 U.S. dollars) in 2005, 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 the household expenditures go to health care, 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 the haves and the have-nots.

About 80.7 percent said it was time to correct the imbalances, while only 14.1 percent believed "there is no need to change."

China's government has made narrowing the income gap one of its top priorities and a corner stone 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[U] while [U]one represents the largest income disparity.

According the World Bank, China's Gini Coefficient was 0.45 in 2005. The index in India is 0.33, the United States 0.41 and Brazil 0.54.

http://news.xinhuanet.com/english/2007-01/...ent_5575710.htm



Poor countries (those with low per-capita GDP) have Gini coefficients that fall over the whole range from low (0.25) to high (0.71), while rich countries have generally low Gini coefficient (under 0.40).

US:

US income gini coefficients over time

Gini coefficients for the United States at various times, according to the US Census Bureau:

* 1970: 0.394
* 1980: 0.403
* 1990: 0.428
* 2000: 0.462
* 2005: 0.469

Some argue this rise corresponds to the lowering of the highest tax bracket, for example, from 70% in the 1960s to 35% by 2000. However, many other variables that could affect the Gini coefficient have changed during this period as well, such as shifts in the economy toward fields, including technology, that require education.

The Gini coefficient measured for a large economically diverse country will generally result in a much higher coefficient than each of its regions has individually. For this reason the scores calculated for individual countries within the EU are difficult to compare with the score of the entire US.

** The EU does not keep all inclusive Gine figures only individual states which lends itself to lower numbers if the US gave each US states Gini number as the Eu does, its individual State number is inherently going to be lower than the all inclussive number based on the techical issue in inherent in this measure.

http://en.wikipedia.org/wiki/Gini_coefficient



International Gini figures 2004

http://hdr.undp.org/reports/global/2004/pdf/hdr04_HDI.pdf

Is this not unlike the US in the early 1900's when industrialization began to take place? Those that took advantage of the new opportunities prospered. The same could be said of the internet and the information age. This suppossed wealth disparity is do to the ambitions of those that seek opportunity and are successful at their endeavors.

This "Gini Coefficient" is a farce. It only take a few successful people in a wealth stagnant society to create an "income gap". Those at the bottom are not earning less. Those at the top are earning more. And those at the top will raise the incomes of those below. For those that are willing to work, anyways..................

When the new chairman or president of China took over from Jian Ximing a couple of years ago, this subject was in his first address to his congress: the income disparity of the countless poor Chinese in the west and other regions, compared to the prosperous east coast and Bejing.

Amazing, that in a country and economy that is still officially Communist, medical costs are very high, and there is such income disparity.

I don't know if 7,100 Chinese households are sufficient to measure the country, but the results speak for themselves.

My best friend rents out his condo in Shianghai. It's less than 1,000 square feet, and is valued at US$250,000 - more than his much larger home in the suburbs of Atlanta!!

One billion desperately poor people, and maybe a couple hundred million in the middle and upper classes. I spent the afternoon yesterday with an American who taught four years in China. He said the beggars out in the provinces were numerous.