China's widening income gap causing alarm

China: China's state media rang the alarm bells yesterday about a widening income gap as the economy simmers.

China: China's state media rang the alarm bells yesterday about a widening income gap as the economy simmers.

It warned that the situation could become dangerously unstable if nothing is done to reduce the difference between rich and poor.

"Decision-makers should not turn a blind eye to the big income gap," said the article in Study Times, an influential journal sponsored by the Party School of the Central Committee of the Communist Party.

China is still nominally a communist country, albeit one with Chinese characteristics, but maintaining social order is central to the Communist Party's efforts to retain power.

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The Chinese government has made a very public point of fighting the growing disparity of incomes as part of its concept of building a "harmonious socialist society".

If the wealth gap gets too large it could mean civic unrest on a grand scale, something the Communist Party does not want. As it stands the situation is currently at yellow-light alert level.

"Unless effective measures are taken the gap may drift further to the dangerous 'red light' level in the next five years," warned the report.

Decades of powerful economic growth have improved the fortunes of most Chinese, but the benefits have been focused on the rich city dwellers of the eastern seaboard and the southern provinces. This has lead to a huge wealth gap.

While some people have attained stratospheric levels of wealth, around 800 million farmers still live on less than €1 a day. The Communist Party fears that if the gap between rich and poor becomes too wide it could lead to widespread social instability.

"It's worth noting that according to experience in many countries and regions, social contradictions will increase as per capita GDP grows from the $1,000 to the $3,000 level. China is precisely in this period," said the article, which was reprinted in many Chinese newspapers.

The Communist Party, which was founded in Shanghai in 1921, has ruled China with an iron fist since it came to power after a revolution in 1949. However, it has experimented with modest reforms in recent years.

Many of the new rich were private business people who climbed the ladder through their own efforts, the Study Times said.

However, the ranks of the super-rich also included people who had used corrupt means to get there, either by bribing officials, taking advantage of their positions as cadres or by cheating on privatisation schemes.

The report insisted that it was "one-sided" to blame market reforms for the wealth gap, and urged the government to continue with reforms, including property rights, breaking monopolies and establishing a sound social security net.

The article was published on the same day as Chinese people watched anxiously to see what would become of a murderer sentenced to death for killing four people and seriously injuring another in a fit of rage after his wages were not paid.

Migrant worker Wang Binyu is a classic example of someone on the impoverished, powerless side of the income gap.

There are 120 million rural migrant workers in China, and there are fears that if the migrant workers ever get organised they will be a powerful political force.

Desperate to get the money he was owed to pay for his father's medical bills, Mr Wang stabbed his foreman and three of the foreman's family and seriously injured a colleague.

His death sentence is currently under appeal at the Ningxia High People's Court.

The case has been widely reported and the public has shown great sympathy for Mr Wang.

Before his fit of rage Mr Wang had asked local courts and labour offices in vain for help with his case.