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CHINA: A gap between rural and urban incomes

Paul Simon forwards this report on disparities on income distribution in China:

Hu Angang: wealth-divide warning

China's rural and urban residents are living in two separate systems as income disparity widens, according to a leading academic. Hu Angang, director of the Centre for China Studies run by the Chinese Academy of Sciences at Tsinghua University in Beijing, says in his new book, China Strategic Concepts, that farmers ar losing out as China reforms its economy. He uses "one country, two systems but four societies" to describe China today, according to a report by China News Service. In the book, he says that rural and urban residents have been living under two different systems in terms of residency control, education, employment, public services and taxation for decades. This segregation exacerbates income disparity between the rural and urban populations and is responsible for the decline in public services for the poor.

Mr Hu is sympathetic towards rural residents, saying most are denied the opportunity to influence public policies that affects their daily lives. Although China has made great advances in raising people's living standards and there are more people engaged in manufacturing and service industries than before, agriculture remains the main pillar of China's economy. In his analysis, Mr Hu divides the population into four societies: farming, manufacturing, services and knowledge. Only about five per cent of China's workforce is engaged in what Mr Hu calls the knowledge society -professions such as technology, education, health, finance, business and the civil service.

The leading scholar warns that it is imperative for government officials to bear in mind that mainland society is so divided when they formulate public policies. He suggests that in order to narrow the gap in wealth between urban and rural residents, the Government should speed up the process of urbanisation, invest more in the economically backward western provinces and accelerate the development of manufacturing, service and knowledge sectors.

Ronald Hilton - 2/5/02