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Last Updated: Wednesday, 21 September 2005, 09:42 GMT 10:42 UK
China warns on wage gap 'unrest'
Incomes are two-third lower in Chinese rural areas
Rural areas are being left behind by the growing urban affluence
The gap between rich and poor in China has reached dangerous levels and may create social unrest, state paper Study Times has reported.

Growing wealth in cities like Shanghai has not been shared by rural areas.

The Ministry of Labour and Social Security says income disparity is at "yellow alert", its second-most serious level, and may reach "red alert".

"If it continues this way for a long time, the phenomenon may give rise to various forms of instability," it said.

'Inequality of opportunity'

Earlier in September, the Organisation for Economic Cooperation and Development (OECD) produced a glowing report on China's economy.

In its first analysis of the country, the OECD said China's economy had grown by an average of 9.5% a year over the past 20 years.

Chinese beggar
Millions of Chinese live in poverty

However, the most affluent one-fifth of China's population earn 50% of total income, with the bottom one-fifth taking home only 4.7%. Last year the average rural income was 2,936 yuan ($362), less than one-third of the urban income of 9,422 yuan.

Chinese economist Wu Jinlian was quoted in Study Times as saying that "inequality of opportunity" was the root cause of the income gap.

China's economic boom continues to make headlines, with a growing number of rich and middle-class citizens, increased foreign investment, surging construction and growing exports.

But in rural areas a number of Chinese are frustrated by growing social inequality, massive corruption and illegal land requisitions.

Business owners

Many of the 6,000 workers who died in China's coal mines last year were migrants from the countryside in search of work.

According to the China Poverty Relief Fund, nearly 30 million Chinese live in absolute poverty.

The article says the rich population included private business owners who got rich thanks to their talent and diligence.

However, it also consisted of those who gained wealth through collusion with officials in power-for-money deals, or because they happened to work in monopoly companies or through stealing state assets.

The Ministry of Labour and Social Security report urged the government to push forward reform of property rights to state assets.

It also called for the break up monopolies and establishment of a robust social security net.

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