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Income gap remains high, report shows

By Wei Tian (China Daily)

09:33, December 11, 2012

China faces extraordinary inequality in its social distribution system, but the government still has adequate options to deal with the problem, according to a semi-official report.

The country's Gini coefficient, which is commonly used as a measure of inequality of income or wealth, stood at 0.61 in 2010, much higher than the alarm level of 0.4, a report from the Survey and Research Center for China Household Finance showed on Sunday.

The level was also well above the global average of 0.44, according to the World Bank's release.

A higher Gini coefficient stands for higher inequality. Zero represents perfect equality while an index of one would be maximum inequality.

According to the report, inequality was higher in villages than in cities, as the coefficient for rural households was 0.6, while that for urban families was 0.56.

Meanwhile, the Gini coefficient in eastern regions, which was 0.59, outstripped that of western provinces, which was 0.55, the report showed.

The figures were an update of the last official release on the country's inequality level in 2000, which put the overall Gini coefficient at 0.412.

The new data was published by a center co-founded by Southwestern University of Finance and Economics and the Institute of Financial Research of the People's Bank of China.

Gan Li, head of the research center, said such a high Gini coefficient is "rarely seen in the world", but he also said "it is a common phenomenon for fast-growing economies, as a result of the effective resource allocation by the market, and so should not be feared too much".

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