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Urban Income Gap Widens to Alarming Level

The National Development and Reform Commission (NDRC) said in a report issued on Sunday that China's urban income gap between rich and poor has widened to an alarming and unreasonable level.

The NDRC made the announcement in line with a social investigation into China's urban residents and relevant statistics from the National Bureau of Statistics (NBS).

The NDRC said China's income gap is continually expanding. At present, China's Gini Coefficient (an internationally accepted measurement of income equality) is 0.4, the international benchmark for alarm.

And the NDRC warns the actual figure may be even higher as a number of incomes may have been underestimated.

Statistics show that the 20 percent low-income group in China's cities only get 2.75 percent of the country's total urban income, or equivalent to only 4.6 percent of the income of China's 20 percent top-level rich group.

The NDRC said the widening income inequality gap is occurring in line with China's economic and social development.

It attributes the growing income gap between different industries, between the employers and the employees, and the increase in income earned outside of main work as the main reasons for the inequality.

Professor Li Yingsheng of the Renmin University of China, who participated in the social investigation on urban income, said China is still lacking an income adjustment mechanism.

Professor Li urges the government to further increase the proportion of middle-level income groups and try to raise the income of the lowest-level groups, to achieve a stable social classification.

Officials with the NDRC said the government has also pledged to take tougher measures in the coming years to curb the increasing inequality and make China's income distribution more reasonable.

(Xinhua News Agency February 7, 2006)

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