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Growing income disparity ‘threatening development’

South China Morning Post, Monday 12 March 2001

The widening gap between rich and poor is threatening social stability and economic development, according to Chinese lawmakers and advisers.

Members of the National People's Congress and the Chinese People's Political Consultative Conference have called for more measures to prevent income polarisation.

Jin Renqing, an NPC deputy and director of the State Administration of Taxation, said social stability and economic development would be affected if the problem was not addressed, Xinhua reported.

Tao Wuxian, an NPC deputy from Sichuan province, said income gaps existed between urban and rural areas, between different regions and between different lines of business.

Chinese society has entered a zone of income distribution inequity, he told Xinhua.

Xinhua said a survey of more than 40,000 urban families conducted last year by the State Statistical Bureau had shown that high-income residents, who made up 20 per cent of the total, owned 42.5 per cent of the total wealth.

Xinhua said the income gap between urban and rural families had been increasing in recent years as farmers' per capita income grew at a much slower rate than that of urban residents.

In inland Sichuan, a local employee earns an average of less than 6,000 yuan (HK$5,640) a year while a typical worker in eastern coastal areas earns an average of 20,000 yuan.

In his report on the 10th Five-Year Plan (2001-2005), Premier Zhu Rongji conceded that slow growth in the income of rural people and among groups of urban residents posed one of the country's biggest problems.

Xinhua said some NPC deputies urged the Government to increase aid to poverty-stricken people and create job opportunities.

Chinese officials last week raised the estimate for urban unemployment in the coming five years to five per cent from about three per cent.

They said about 10 million people would become jobless over the next five years.

Beijing is also faced with an uphill task to improve living standards for 900 million farmers.

While urban people enjoy a range of social and medical benefits, farmers rely on family networks to cope with unemployment, illness or family deaths.

Mr Jin said authorities would strengthen tax collection from high-income groups and require employers to deduct tax before salaries were paid.