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China among world's most unequal countries: survey
by Staff Writers
Shanghai (AFP) Dec 10, 2012

Xi's Shenzhen visit a sign of reform: Chinese media
Beijing (AFP) Dec 10, 2012 - China's new Communist Party chief Xi Jinping has signalled his commitment to push for economic reforms by visiting the city of Shenzhen, the historic hub of modernisation, state media said Monday.

Xi's trip, his first official one as ruling party leader, echoed a visit by then-leader Deng Xiaoping to the southern boomtown in 1992 to revive reforms.

Deng had launched China's economic modernisation more than three decades ago under the slogan "Reform and Opening".

According to analysts the pace of restructuring has slowed in the last decade under outgoing leader Hu Jintao, but Xi's choice of destination sent a clear signal.

"The party Central Committee's decision to undertake Reform and Opening was correct," Xi said, according to the Nanjing Daily.

"We will continue down this path, unswervingly continue down the path of enriching the country and the people, and will break new ground."

Authorities stressed their commitment to reform during the once-a-decade party leadership handover last month that put Xi in the top spot.

They face growing calls to realign the economy to ensure long-term growth, by reducing reliance on investment and exports and boosting domestic consumption.

Growth slowed to a three-year low of 7.4 percent in the third quarter of this year, hit by the global economic slowdown. Leaders have warned that the past years of dramatic double-digit growth are unlikely to return.

"It is high time the Party stepped up reform and opening up," the Global Times quoted Huang Weiping, director of the Contemporary Chinese Politics Research Institute at Shenzhen University, as saying.

"And Xi chose to visit Shenzhen now because he is aware that China has just experienced a major crisis, and crisis always drives further reforms."

Xi is due to take over as national president in March.

Shenzhen served as an early "special economic zone" in the 1980s, a laboratory of sorts as the communist country began to seek foreign investment.

The experiment transformed it from a small village bordering Hong Kong to a bustling modern city and helped initiate years of roaring growth for the country.

During his trip late last week Xi visited a fishing village and an industrial park which is home to the IT giant Tencent Technology, the China Daily reported. He also laid flowers at a statue of Deng in a park.

China's wealth gap has widened to a level where it is among the world's most unequal nations, a Chinese academic institute said in a survey, as huge numbers of poor are left behind by the economic boom.

China's Gini coefficient -- a commonly used measure of inequality -- was 0.61 in 2010, the Survey and Research Center for China Household Finance said, well above what some academics view as the warning line of 0.40.

A figure of 0 would represent perfect equality, and 1 total inequality.

"Currently, China's household income gap is huge," said the institute, founded by the Southwestern University of Finance and Economics and the Institute of Financial Research, which operates under China's central bank.

"The Gini coefficient is as high as 0.61, rare in the world."

China's growing wealth gap is a major concern for Communist authorities, who are keen to avoid public discontent that could lead to social unrest in the country of 1.3 billion people.

In a sign of the sensitivity surrounding the issue the government has not released an official Gini coefficient for the country as a whole for more than a decade, since it put the statistic at 0.412 in 2000.

A figure of 0.61 would put China at the top of a list of 16 countries by 2010 Gini coefficient on the World Bank website. The largest set of figures available on the site is for 2008, covering 47 countries and headed by Honduras on 0.613.

The Global Times newspaper, which reported the latest survey results on Monday, said China's wealth gap had reached an "alarming" level.

But the research centre played down its own findings, saying such a phenomenon was common in rapidly developing economies.

It called on the government to use its vast financial resources to support low-income earners in the short term, while improving education to help address the imbalance in the long term.

"The Gini coefficient certainly points to the serious issue of income inequality," the director of the Chengdu city-based centre Gan Li told AFP.

"But more importantly about the interpretation of the figure is that it does not necessarily indicate imbalance in China's economy," he said, adding it was normal for greater resources to flow to developed areas.

"There's no need to make a big fuss about it."

The government-backed Chinese Academy of Social Sciences estimated China's Gini coefficient at nearly 0.47 in 2005.

Another research institute, the Centre for Chinese Rural Studies, in August put the Gini coefficient at around 0.39 for rural residents last year, but gave no figure for the overall national level.


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