Growing wealth disparities in China attracting government attention – UN report

China’s wealth gap between urban and rural communities is among the highest in the world, but a United Nations Development Programme (UNDP) report released today finds the Government is coming to grips with the widening disparities that threaten the country’s stability.

China succeeded in lifting 250 million people out of poverty over the past 25 years, but during the same period income inequality has doubled, according to China’s Human Development Report 2005.

While the average city resident in China city earns $1,000 a year, that figure drops to just $300 in the countryside, UNDP said. An urban citizen can also expect to live over 5 years longer than a farmer. In Tibet, only half of the population can read and write compared to near-total literacy among Chinese living in Beijing, Shanghai or Tianjin. Nationally, women are twice as likely as men to be illiterate.

Khalid Malik, UNDP’s Resident Representative, said the Chinese Government has started to tackle these problems. “This report is particularly timely as the Government is shaping its new economic blueprint to ease the strains of inequality,” he said, warning that when economic growth leaves the poor behind, social unrest usually follows.

UNDP cited a number of steps being taken by the Government to address the problem, including the abolition of agriculture taxes and compulsory education for the rural poor.

The report contains a number of recommendations for further tackling the problem, including the creation of an inclusive social security and pension insurance system, further financial reforms to encourage more people to set up their own businesses, greater investments in basic health services, and priority attention to primary education.

In another development, the UN International Fund for Agricultural Development (IFAD) today announced that it will provide a loan of nearly $30 million to help finance an $81 million initiative benefiting 300,000 poor rural households in China’s South Gansu Province. The Chinese Government is picking up most of the bill, while the UN World Food Programme (WFP) is providing an additional $4.7 million grant.

The programme will promote irrigation, terracing and tree planting to arrest soil degradation and increase agricultural yields. It will also ensure better access to clean drinking water, health services, education and financial services.