China's gap between city and country incomes at widest ever

The gap between incomes in cities and the countryside has reached itshighest level in 30 years despite a rapid rise in rural earnings, the statemedia has reported.

China's agriculture minister told officials today that per capita income in the countryside rose by 10.3% in the six months to June and predicted the annual figures would break all records. Last year's 9.5% increase was the largest since 1985.

Rising prices, migrant labourers sending money home from cities, and the growth of subsidies for farmers were all playing their part, added SunZhengcai, quoted in China Daily.

But he warned the future is uncertain because farming costs have risensharply and migrant workers face massive job losses because export-oriented factories are cutting production or closing as the yuanappreciates against other currencies.

Rural incomes have risen markedly over the last few years, reaching 4,140 yuan (£330) per capita in 2007, compared to 13,786 yuan (£1,100) in urban areas.

But Sun told a meeting of officials that the ratio of urban to rural incomeper capital reached 3.31:1 last year, the highest since economic reformsbegan three decades ago.

According to recent research by the World Bank, the number of Chinesepeople living on less than $1 a day fell by more than 600m between 1981 and 2005.

But that has left 106m struggling on a tiny income and concern is mounting about the gulf between city and countryside.

In a paper published by the Nautilus Institute this week, Professor YuJianrong of the Chinese Academy of Social Sciences, and Yu Debao, apostgraduate student at Peking University, said many believed that the gap between rich and poor was one of the main contributors to "mass incidents".

Around 60% of the Chinese population still live in the countryside, butofficials believe that the situation will be reversed within 20 years.