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Rural-urban Income Gap to Widen This Year

China will continue to suffer a large income disparity between rural and urban areas this year, according to a blueprint of the Chinese Academy of Social Sciences.

The per capita income in rural areas will reach about 3,500 yuan (US$415) this year, an increase of more than 5 per cent over last year, the blueprint said.

However, the growth rate is lower than that in 2005, which saw a 6.2 percent increase over 2004, according to the blueprint, while the per capita income in urban areas grew by 9.6 percent in 2005 over the previous year.

The China Daily quoted Monday an expert as saying that the widening income gap between rural and urban areas will continue this year and farmers' consumption capability will remain low.

The low wages of migrant workers and the relatively low price of agricultural products were to blame for the widening income gap, according to Ma Xiaohe, deputy director of the Academy of Macroeconomic Research with the State Development and Reform Commission.

In China, the wages of farmer-turned laborers serve as an important income source for rural families, which, however, have been slow to increase compared with the rapid rise in urban wages over the past few years.

"The slower increase of wages for migrant workers, to a large extent, hinders rural families' income growth," Ma was quoted as saying.

About 40 percent of farmer-turned laborers earn an average monthly wage of about 500-800 yuan (US$62-100), according to a recent survey conducted by the Research Office of the State Council.

To boost the rural development, China has launched a new drive to build a 'new socialist countryside' during the 11th Five-Year Guidelines period (2006-2010).

The central government will allocate a budget expenditure of 339.7 billion yuan (US$42 billion) this year for the building of 'new socialist countryside', 42.2 billion yuan (US$5.2 billion) more than last year.

Ma said that farmers' income will continue to grow this year, spurred by the new drive.

(Xinhua News Agency April 18, 2006)

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