Wealth Gap over Alarming Level in All Regions

China's wealth gap is now 50 percent above an alarming level, a survey showed.

The Gini coefficient was 0.61 in China in 2010, based on a survey of 8,438 households in the country by the Survey and Research Center for China Household Finance, a body set up by the Finance Research Institute of the People's Bank of China and Southwestern University of Finance and Economics.

The Gini index ranges from 0, which represents perfect equality, to 1, which implies perfect inequality. Readings above 0.4 are used by analysts as a gauge of the potential for social disturbances.

The index is also measured on a scale of 0 to 100. The World Bank put China's Gini index at 42.48 for 2005, the last year it published a figure for the country.

"The gap is wide in all regions and both rural and urban areas," said Gan Li, a chief researcher and a professor at the university.

But he said the reading is not "dreadful" as the wide rich-poor gap is common in a country's economic development, and "we hope the government could spend more on improving people's social welfare."

The widening inequality reflected in the Gini reading may exacerbate concerns that the benefits of economic growth averaging 10.6 percent a year over the past decade are going mainly to the rich.

The report also estimated the urban jobless rate to be 8.05 percent in July this year, almost double the official figure and 0.05 percentage point higher than July last year.

China's urban registered jobless rate, the only official measure of unemployment, was 4.1 percent at the end of September, unchanged from the previous eight quarters. The rate rose to a more than eight-year high of 4.3 percent in 2009 during the global financial crisis.

The official data understate unemployment because they exclude millions of rural workers who migrate from one province to another to find jobs. The government set a target of keeping the urban jobless rate under 4.6 percent this year.

"Raising minimum salary could lift average individual income but would also hurt employment," Gan said.

He suggested the "government could take 3.8 trillion yuan from fiscal revenue and state-owned enterprises' profits to narrow the wealth gap without imposing new taxes or cutting fiscal spending."

Last week Xi Jingping, the new leader of the Communist Party of China, pledged to improve social equality as the country faces problems such as wealth gap, medical services and environment protection.