China's Urban Income Gap Alarming

China's state planning agency says urban income gap 'alarming'
6 February 2006



BEIJING (AP) - The income gap between rich and poor in China's cities has reached "an alarming and unreasonable level," the government said Monday.

According to a report from China's Cabinet-level State Development and Reform Commission, the poorest 20 percent of urban residents earn just 2.75 percent of the total urban income, the official Xinhua News Agency report said. It did not give specific income levels or say what percentage of the total was earned by the richest 20 percent.

"China's urban income gap between rich and poor has widened to an alarming and unreasonable level," Xinhua said, paraphrasing the report.

The report released Sunday said that China's overall income gap was "continually expanding" and that its Gini coefficient, a measure of income equality, had hit 0.4. It gave no breakdown for China's different regions or cities.

The Gini coefficient, named for the early 20th century Italian statistician Corrado Gini, describes a ratio with a range from zero, for perfect equality, to one, indicating that all income is held by one person and everyone else had none.

The closer to zero a country falls, the more evenly income is distributed among residents.

The commission warned in its report that the actual figure may be even higher because people may have underestimated their incomes.

China's leaders have pledged to narrow the income gap for fear it could lead to widespread unrest.>