Income disparity getting worse: Report

By Xin Zhiming (China Daily)
Updated: 2007-08-09 07:17

China's Gini coefficient, a standard measure of a country's overall income inequality, rose to 0.473 in 2004 from 0.4 in 1993, according to a report by the Asia Development Bank (ADB) released yesterday.

It is the latest figure for assessing income disparities and crosses the international warning line of 0.4.

A coefficient of between 0.3 and 0.4 is generally deemed normal, but the larger it is, the more serious the inequality.

The World Bank said in a previous report that China's Gini coefficient was 0.45 in 2003, a figure that aroused widespread concern.

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Government officials have said the coefficient was not accurate in reflecting China's inequality level, as it does not take into consideration of the country's regional gap in consumption.

People in many regions, they said, although earning much less than those in prosperous regions, pay much less for equivalent commodities, such as housing.

But it is undeniable that China is experiencing a very serious income disparity due to its flawed income distribution, Wang Xiaolu, deputy director of the Beijing-based National Economic Research Institute, told China Daily.

Wang said much of the so-called "grey" or hidden income of Chinese people was not included in the official figures, which, if it was, might further push up the coefficient.

Despite its high Gini coefficient, the ADB's chief economist Ifzal Ali acknowledged China's efforts to improve the well-being of the poor.

China's dibao (policy) is a step "in the right direction", he said at a news conference yesterday to launch the Key Indicators 2007 report.

China started to establish a minimum living allowance system, dibao, in urban areas a decade ago and has spread it to the rural region, in a bid to guarantee a minimum standard of living for the poor.

China's "stellar role" in meeting the needs of the bottom 20 percent of its people "is better than any other Asian country", Ali said.

Inequality has been rising throughout most of Asia since the 1990s and the widening disparities may threaten the continent's growth prospects, the report said.

To help the poor, the ADB suggested more public investment should be made in agriculture and the poor should be granted easy access to basic health services and primary education.

(China Daily 08/09/2007 page3)

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