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China one of the most unequal nations

Dec 10 2012 10:01 AFP

(Supplied)

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Shanghai - China's wealth gap has widened to a level where it is among the world's most unequal nations, a Chinese academic institute said in a survey, as huge numbers of poor are left behind by the economic boom.

China's Gini coefficient - a commonly used measure of inequality - was 0.61 in 2010, the Survey and Research Center for China Household Finance said, well above what some academics view as the warning line of 0.40.

A figure of 0 would represent perfect equality, and 1 total inequality.

"Currently, China's household income gap is huge," said the institute, founded by the Southwestern University of Finance and Economics and the Institute of Financial Research, which operates under China's central bank.

"The Gini coefficient is as high as 0.61, rare in the world."

China's growing wealth gap is a major concern for Communist authorities, who are keen to avoid public discontent that could lead to social unrest in the country of 1.3 billion people.

In a sign of the sensitivity surrounding the issue the government has not released an official Gini coefficient for the country as a whole for more than a decade, since it put the statistic at 0.412 in 2000.

A figure of 0.61 would put China at the top of a list of 16 countries by 2010 Gini coefficient on the World Bank website. The largest set of figures available on the site is for 2008, covering 47 countries and headed by Honduras on 0.613.

The Global Times newspaper, which reported the latest survey results on Monday, said China's wealth gap had reached an "alarming" level.

But the research centre played down its own findings, saying such a phenomenon was common in rapidly developing economies.

It called on the government to use its vast financial resources to support low-income earners in the short term, while improving education to help address the imbalance in the long term.

"The Gini coefficient certainly points to the serious issue of income inequality," the director of the Chengdu city-based centre Gan Li said.

"But more importantly about the interpretation of the figure is that it does not necessarily indicate imbalance in China's economy," he said, adding it was normal for greater resources to flow to developed areas.

"There's no need to make a big fuss about it."

The government-backed Chinese Academy of Social Sciences estimated China's Gini coefficient at nearly 0.47 in 2005.

Another research institute, the Centre for Chinese Rural Studies, in August put the Gini coefficient at around 0.39 for rural residents last year, but gave no figure for the overall national level.

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