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CPC paper warns of lower social mobility due to continuous rich-poor gap

(Xinhua)    16:37, January 23, 2015

BEIJING, Jan. 23-- The People's Daily, the flagship newspaper of the Communist Party of China (CPC), on Friday warned of the dangers financial inequality posed to society.

The newspaper drew attention to the fact that the rich/poor divide had stabled and was extending to the next generation.

The index reflecting income inequality, the Gini coefficient -- which ranges from 0 (complete equality) to 1 (complete inequality) -- dropped for the sixth consecutive year since it peaked in 2008, but was still deemed high at 0.469 in 2014, according to the National Bureau of Statistics (NBS).

Measures over the past five years, such as a social security system for rural residents and a 4 trillion yuan (642 billion U.S. dollars) stimulus package initiated in 2008 that was mainly used for infrastructure, aimed to close the income gap between urban and rural residents.

Dean of the National Academy of Development and Strategy of the Renmin University of China, Liu Yuanchun, said these measures had seen positive results.

However, he said, income distribution issues remain, both between urban and rural residents, and between high and low income urban residents.

China has seen a widening income gap between its urban population since 2006.

"It's easier to turn a profit with capital but more difficult to make money through working; therefore, economic activities have made the rich richer and the poor poorer," he said.

Professor at the Beijing Normal University Business School, Li Shi, said besides the income gap, the widening wealth gap also deserves more attention.

The personal wealth growth rate has hit an average of 22 percent each year over the past decade and the value of real estate grew by 25 percent each year, while in rural areas personal wealth only grew by 11 percent.

The paper said that an inequality gap due to market economy behavior was "reasonable", but the gap caused by unequal opportunity, unbalanced resource allocation and behavior by those with political power was not.

There are concerns that the income of those with lower-end jobs will stop increasing as rapidly as in recent years or even drop. The income gap will only worsen if employment, social security and income reform measures are not accelerated.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Wang Ao,Yao Chun)

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