China to tackle growing wealth gap head-on
Beijing: Growing wealth gap in China has been identified as the most pressing problem for the Asia's largest emerging economy and the ongoing once-in-a-decade leadership Congress of the ruling Communist Party is looking to tackle the issue head-on, according to a report.
Rapid growth of China's economy is leaving millions behind and yawning gap between rich and poor is growing. During this time of transition, the country's leaders are looking to tackle the issue head-on, state-run CCTV reported.
China's Gini coefficient which reflects the wealth gap of a country stood at 0.438. That's up from just 0.2 roughly 30 years ago. A figure higher than 0.4 is generally considered troubling, the report said.
"More than one hundred million people still live on USD 1 a day here in China. That's in a country that's home to the second most billionaires behind the US. And analyst say that as China's phenomenal economic growth begins to cool, frustration with the gap between the haves and have-nots is growing," it said.
Chen Jiahe, an analysts from China Cinda Securities, said, "I don't think it's (the income gap) will keep widening. Firstly is that China is still a development country and you will always find that the income discrimination is always highest in the developing country."
"It's because China took the path of export-oriented development, so that means the coastal provinces who gets the job gets the highest income," he said.
Also as a result of China's privatisation some of its state-owned enterprises in the past twenty years made some people very rich - and that's a problem, he said.
In a bid to narrow the gap, the Chinese government is currently drafting an income distribution reform plan hoping to address the disparities, the report said.