China's Economic Disparity Gap

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China is quickly becoming a dominant world power. Its economy has grown amazingly fast and they now have the second largest economy in the world. Although this growth is impressive, China still faces many social issues. One such issue is that of the-urban rural disparity gap. The year 2005 proved to be another banner year for China’s economy. According to the Chinese Bureau of Statistics, China’s Gross National Product in 2005 increased 9.9% from its 2004 level to reach 18232.1 billion RMB. This marks the fourth straight year where GDP growth rate has surpassed eight percent. However, hidden underneath the surface of China’s spectacular growth is a disturbing phenomenon. China’s current economic growth occurs mostly in its urban centers. In the vast rural areas where 807 million people, 61.6% of China’s population reside, economic progress has come at a relatively slow pace. In 2005, China’s primary industry output grew 5.2% in value, while the secondary industry and the service industry grew at 11.4% and 9.6% respectively. This indicates there has been an increase in the income disparity between the urban and rural populations. According to official statistics, the annual disposable income per capita in 2004 was 9422RMB in urban areas, and 2936RMB per capita in rural areas, creating an urban/rural income ratio of 3.21:1. Compared to the ratios of 2.2:1 in 1990, 2.71:1 in 1995, and 2.9:1 in 2001, the sharp increase is both obvious and alarming. China’s urban/rural income ratio has become the worst in the world. Furthermore, city residences enjoy many social welfare benefits such as housing subsidies, health insurance, and a minimum wage that most rural residences do not enjoy. If these benefits are counted as income, it is estimated that the urban/rural income ratio would reach a staggering 5:1. Growing wealth inequality between towns and country is a problem most

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