IN A NEW report published by the Institute for Urban and Environmental Studies at the Chinese Academy of Social Sciences, researchers have found that China’s urban-rural income gap ratio is one of the highest in the world.
Even though as early as 2005 statistics from the International Labor Organization showed that income disparity ratios between urban and rural were lower than 1.6 for the majority of countries around the world, China’s current ratio is more than double, at 3.23:1, with the ratio even reaching 4:1 in China’s central and western provinces, according to China Economic Weekly, a business magazine published by the state-run People’s Daily.
The report said that only three countries including China had exceeded 2:1 as of 2005, while the ratio in developed countries such as the United States and Britain stood at between 1 and 1.5.
Song Yingchang from the institute told the magazine:
The ratio shouldn’t continue to rise, otherwise it would be a failure of our reform policies. It is estimated that the number will shrink, but it will not shrink too much, probably just around 3.2.
While the magazine attributes the startling ratio to “different economic structures” and “unequal development opportunities between urban and rural areas,” it carefully avoid shedding any light on China’s widely criticized housing registration system, hukou, as a cause of the disparity.
Frank Xie Tian, a professor at Drexel University’s College of Business Administration in Philadelphia, told The Epoch Times in 2008:
In China, one is registered as a rural or urban resident depending on where one was born. But this registration system does not allow the relocation of the work force. By discarding this system, it will naturally remove the difference between rural and urban areas. If people who make less money in rural villages can go to the cities, this gradual process will reduce the rural-urban gap.
The hukou system, even though devised in the Maoist era for social control, still effectively impedes many Chinese from moving between urban and rural areas, enrolling in public schools outside of their registered districts, and even obtaining marriage licenses.
Today’s China still has 708 million, or most of its 1.3 billion people, living in rural areas as of 2010, even though 51 percent of the world’s population now lives in urban areas.
(Photo: A graph showing China’s urban-rural income gap ratio from 1978 to 2010, according to data from China’s National Bureau of Statistics. China Economic Weekly)