China's income gap to further widen in next five years

17:06, September 13, 2010      

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China's residential income gap will further widen in the coming five years, said Fan Gang, director of the National Economic Research Institute (NERI), on Sept. 10.

"The trend of the widening income gap will last for the long term and will not improve over the next five to 10 years," he said.

Fan said the widening income gap in China can be attributed to three reasons: the social system, the problems of social development and a lack of public policies.

At present, more than 30 percent of the labor force works in agriculture compared with the 2 percent in the United States and 6 percent in South Korea. Another 30 percent of the labor force is rural migrant workers who work in the industrial and service sectors earning only 1,500 U.S. dollars a year on average. These rural migrant workers, despite earning such a low salary, still earn much more than the labor force in the countryside.

Fan explained that fierce competition dragged down wages from non-agricultural jobs, and in the past 15 years, the productivity of non-agricultural labor force grew at a rate of 10 percent to 12 percent a year, compared with the 4 percent to 6 percent yearly growth in rural migrant workers' wages. As a result, the income gap between the low-end labor force and professionals and experts further widened.

By People's Daily Online

(Editor:祁澍文)

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