China's Urban-Rural Income Gap Record High

The per capita income gap between Chinese urban and rural residents has widened beyond 10,000 yuan as of the end of 2008, according to recently released government data.

This is the first time since the emergence of modern China that the gap crossed the ten thousand bar.

Official statistics revealed that last year, per capita income of Chinese rural residents stood at 4,700 yuan, as opposed to over 15,000 yuan enjoyed by urban residents.

The data was disclosed by Chen Xiwen, director of the Office of the Central Rural Work Group, at the Observer Forum held in Beijing on Jan 11.

The Forum - with speakers ranging from policymakers, entrepreneurs to scholars - was organized by the Economic Observer to discuss the country's economic prospects and plans for 2009.

Chen said the urgency to address income imbalances had become more pressing, as increasing numbers of farmer-turned-migrant-workers lost their jobs in the cities and returned to the countryside in recent months.

Since the US financial crisis broke out last autumn, numerous export-oriented companies in China's coastal region had been shut down as demand weakened.

Some 30 million migrant workers were estimated to have returned to the countryside as of December 5 last year, of whom some 7.5 million were on the move due to employment problems, said Chen, quoting a survey performed in 29 out of the 34 Chinese provinces and autonomous regions.

China has an estimated 200 million migrant workers.

Chen said this recent massive migration from the urban areas to the countryside was the third wave in recent memory.

He recalled the other two massive flows occurred during the "three-year natural disaster period" from 1959 to 1961, when the government transferred 20 million starving urban residents into rural areas; and the other during the Cultural Revolution when young intellectuals were called to work and live in the countryside.

The most recent human traffic flow into the countryside would add more pressure to income imbalances, Chen said. He added nearly 40% of the rural residents' incomes came from wages instead of agricultural harvests, thus when migrant workers lost their jobs in the cities, it would be doubly hard to raise rural earnings.

To alleviate the problem, he suggested the government transfer some industries in the coastal regions to mid-western provinces, and to set up small-and-medium-sized industry parks in smaller townships.

Also at the forum was Li Jinhua, vice chairman of National Committee of the Chinese People's Political Consultative Conference. Li said the rising of rural incomes depended largely on the government's policies for attracting private capital to invest in the countryside.

He said more attention should be given to county-level economies and cottage industries, and to speed up urbanization to absorb the surplus rural labor force.