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Large income distribution disparity

(Chinanews.cn)
Updated: 2006-06-22 11:08

Chinese vice finance minister Lou Jiwei recently pointed out that a large income distribution disparity exists in China, and for some, such inequality is determined "at the very beginning."

He said that in China, the Gini coefficient, a means for measuring inequality of a distribution, stands at 0.46, above the alarming level. However, if one looks at the Gini coefficient numbers for town and country separately, the Gini coefficient for cities is 0.34, and the relative number for rural areas is 0.37. In other words, the Gini coefficient numbers are not very high among cities and rural areas. However, if the cities and rural areas are taken as a whole, the Gini coefficient number will rise to 0.46, which means that disparity between towns and country is the cause of the sharp rise. Such Gini coefficient number might be less striking if one gets accustomed to big differences within cities, where slums usually stand side by side with hotels and shopping malls. And it might also cause less damage to social stability. On the whole, the Gini coefficient in China is relatively large; on the other hand, however, it might not appear to be so. He also said that the Gini coefficient number in China has increased very fast. In less than a generation’s time, China’s Gini coefficient number has changed from a “very equal” status to “a sharp contrast” one. This is very striking because usually, the drastic change might be realized only through several generations.

Compared with the large unequal income distribution, it is an even more unfair thing that for many, such inequality is resultant from a lot of pre-determined factors. Although many of such differences arise from people’s differing abilities, their family conditions, and their places of birth, it should not be neglected at the same time that a lot more inequalities are caused by social policies, resulting in people’s unequal opportunities in receiving education, heath insurance, and chances of migration.

Due to this inequality, some people cannot fully demonstrate their talent and potential capabilities. On the other hand, many people turn jobless and live on social relief. Investment and consumption are not proportional, which also has something to do with the unequal income distribution system. In recent years, employment opportunities have been on the decrease in every unit of GDP growth, and fewer job opportunities further deteriorate the income distribution system.