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China: Income Gap a Pressing Issue
Source: shanghaidaily.com
Source Date: Saturday, January 19, 2013
Focus: Institution and HR Management
Country: China
Created: Jan 21, 2013

CHINA'S income gap between rich and poor peaked in 2008 and has narrowed since then, the government said yesterday.

China's Gini coefficient was 0.474 last year on a scale of 0 to 1, down from a high of 0.491 in 2008, National Bureau of Statistics chief Ma Jiantang told a news conference.

The Gini coefficient has stayed at a relatively high level of between 0.47 and 0.49 during the past decade, indicating that China must accelerate its income distribution reform to narrow the rich-poor gap, Ma said.

"After the financial crisis in 2008, China's Gini coefficient gradually dropped from the peak of 0.491 that year as the government took effective measures to bring benefits for its people," Ma said.

Narrowing the income gap is one of the most pressing issues for new Communist Party leaders who took power in November.

"On the one hand, we need to make the cake bigger, while on the other, we need to do a better job of sharing it," Ma said.

China's boom has made multibillion-dollar fortunes for some entrepreneurs but income growth for the majority has been sluggish.

"Now, the government has officially released Gini coefficient, this shows we value the quality of GDP and are not just pursuing quantity," said economist Mao Yushi, one of China's most prominent reform advocates and a co-founder of the Unirule Institute of Economics in Beijing, an independent think tank.

The government also needs to improve the ability of low-income Chinese to improve their lives, which is blocked by some interest groups that control segments of the economy, said Mao.

The Gini figure is based on how much of a country's income goes to each economic level of society. The index ranges from zero for complete equality to 1 for perfect inequality.
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