Report illustrates huge gap between rich, poor
(USA TODAY)
Updated: 2005-12-17 10:04

BEIJING — A landmark United Nations report out Friday lays bare the yawning gap between rich and poor in a China that is racing to modernize.

Developer Shen Guojun, one of China's richest men, says the country's affluent class needs to take steps to help close the wealth gap.
Calum MacLeod, USA TODAY

The China Human Development Report 2005 says China has lifted 250 million of its 1.3 billion citizens out of poverty in the past 25 years. But it urges policy changes to prevent poor Chinese, mainly rural dwellers, from slipping farther behind the country's emerging middle and wealthy classes.

China "has compressed 100 years of change into 20-plus years, and not everything will fit," said Khalid Malik, United Nations resident coordinator in China.

Malik said China's urban-rural income gap is among the highest in the world, and said public health access in the Chinese countryside has fallen dramatically.

By the U.N.'s measures, Shanghai residents enjoy a standard of living on par with people in Portugal. Yet living standards in Tibet, in remote southwestern China, are closer to those in poor African countries.

"The range is stunning," Malik said.

China is "plagued by imbalances in development," the U.N. Development Programme report says. Among the most striking examples:

* A Chinese city dweller earns an average of $1,000 a year, vs. $300 a year for a rural resident.

* Urban dwellers live more than 5 years longer on average than those in the countryside.

* Literacy rates are more than 97% for adults in major cities such as Beijing, Shanghai and Tianjin. In Tibet, only half of the population can read and write. Nationwide, female illiteracy is more than double the rate for men.

Malik said China's most vulnerable are the 300 million to 400 million living on the margins in rural areas — often farmers whose land has been seized for development — or those who have migrated to cities in search of work.

High income inequality "leads to a sense of social inequity, which unemployment and corruption aggravate," warns the U.N. report. "All these are major factors in the deteriorating of social stability."

The report recommends that China set up a social security system for all workers and reform a household registration system that discriminates against the 150 million rural workers who have migrated to Chinese cities. Other recommendations: loans for small entrepreneurs and creation of home-care jobs to serve the elderly.

At the other end of the scale, China's super-rich are flourishing.

A June 2005 survey by the National Bureau of Statistics indicated that the richest 10% of Chinese control 45% of the country's wealth. The poorest 10% of Chinese control only 1.4% of wealth.

That top band are firmly in the sights of multi-millionaire property developer Shen Guojun. Shen's Beijing Yintai Centre, a luxury complex featuring a Park Hyatt hotel, apartments, offices and shops, became the capital's tallest building with the completion Friday of its 63rd floor.

Condominiums will sell for $10,000 a square meter, priciest in Beijing. "I am confident we will sell out in a few weeks," Shen said, adding that the units should appeal to business people, celebrities and others who have attained wealth as China has opened its economy.

Solving the income gap "needs a great discussion between government officials and the whole people," Shen said. Successful businesses "should do more to ease the social burden by paying our taxes, operating legally and employing people."

Shen said he hopes to fund schools and health clinics in rural areas, and encourage other entrepreneurs to make gestures of social responsibility. He has set up the Yintai Charity Foundation "to make a great contribution to charity work in China."

The U.N.'s Malik said the Chinese government "has realized the grave consequences of social inequity and has started to tackle the problem head-on."

Policymakers in Beijing have said China should strive to be a xiaokang — moderately well-off society — by 2020. Many in China now expect basic rights in education, health care and social insurance coverage should be "provided as a public good," Malik said. "It is a challenge to the Chinese government and institutions to deliver that."

The 10 concrete measures the U.N. report recommends to the government include establishing a social security system for every worker, and reforms to the discriminatory household registration reforms to give more rights to the 150 million rural workers who have migrated to China's cities. Other measures include loans for small entrepreneurs and creation of home-care jobs to serve the elderly.

The Chinese government contributed to the U.N. report. Wang Mengkui, president of a research group attached to the Cabinet, wrote that his country "has great potential for development and has a bright future, but historical transformation is often fraught with conflict."