A survey conducted by the Economic Research Institute of the Chinese Academy of Social Sciences indicates the income gap between rural and urban residents has grown wider in the past five years, and could be the largest in the world.

A report based on the nationwide survey shows the average per capita income of urban residents was 3.1 times that of rural residents in 2002, much higher than the 1995 figure of 2.8.

But even this does not indicate the real disparity between urban and rural citizens. The income of urban citizens does not count the welfare they have access to, including medical care, unemployment insurance and minimum living relief, which most rural people cannot access.

With all these factors taken into account, urban residents' income should be four, five or even six times of that of the rural residents.

Hot discussion has been sparked on how to narrow the gap.

Beijing News: The growing income gap is an alarm bell for China's stability and development.

While China's market economy is developing in a fast way, the interests of disadvantaged groups have been seriously hurt by cut-throat competition. It requires the government to distribute for a second time the economic leverages of tax and finance to make distribution of social wealth fairer.

However, from the survey, it seems that the second distribution has not played an effective role. Under such conditions, a third distribution should be introduced - donation by enterprises or individuals through efforts of non-governmental charity organizations.

In the planned economy, since the government controlled most resources, the third distribution played a small role. With the market economy developing and the government bowing out from the role of organizing charities, more resources have been controlled by non-state enterprises or individuals. At this time, a modern charity system should play a role.

But China's current charity system is backward. For example, most charities have been anchored by direct small-amount donations from common citizens, with little from charity organizations or wealthy individuals.

An imperfect charity system leads to such backwardness. Although according to China's regulations about income tax, enterprises or individuals could be exempt from certain taxes by making donations, the exemption ratio remains very low.

Another reason for the backwardness is that some charity organizations are untrustworthy. Scandals about abusing and embezzling donation funds hurt the overall image of charity organizations.

Meanwhile, few domestic enterprises are aware social responsibility. They donate for public relations purposes, not for long-term interests.

Narrowing the gap between rural and urban areas not only needs governmental impetus, but also the non-governmental organizations' endeavor. Non-State donation is beneficial in helping the poor and cultivating a favorable social atmosphere.

Beijing Youth Daily: Tackling problems about farmers, rural areas and agricultural development serves as the linchpin for narrowing the income gap between rural and urban areas.

For a long time, China's farmers have had to shoulder a heavy burden. The rural surplus labor force was not encouraged to transfer into cities, and agriculture could not develop quickly through large scale production.

These problems have become a headache for China's further development and have done much to widen the income gap.

Tax-for-fee reform might be an influential and decisive step for tackling the problems. Although many efforts have been made in the reform, it has not made much contribution to increasing rural people's income.

This year in some places, including Beijing and Ningbo, agricultural tax and surplus will be totally exempted for farmers. It is a piece of good news for local farmers, and it is expected the practice will also be introduced in other places before long.

To increase farmers' income, a system should be sped up to transfer rural surplus laborers to urban areas. But due to restraints of the current registration system, it is difficult for farmers to hunt for jobs in cities. And since the current transfer is not under the guide of policies, it is blind, spontaneous, instable and ineffective.

In order to change this situation, radical reform of the registration system is required, which means not only simply phasing out the system, but creating a complete social system without differences between rural and urban areas.

Xinhua website: Policy-makers have shifted attention to seeking a balance between social and economic development.

Since China started the drive of opening up and reform 25 years ago, its GDP has maintained a 9.4 percent annual increase on average.

However, economic development does not necessarily bring matching social development. Many neglected and unsolved social problems have become more serious.

The gap between rich and poor has widened. Statistics show that China's Gini Coefficient has risen from 0.3 at the beginning of opening up and reform to the current 0.46. It shows that less than 20 percent of the population possesses 80 percent of the wealth.

The unfairness of social public services shows the backwardness of social development. Only 10 percent of people in China enjoy social insurance. Many urban residents have access to pension insurance, unemployment insurance and the minimum living relief. But most rural people cannot access those benefits.

The unbalanced social development has pushed the government to shift from purely pursuing economic development to seeking a balance between economy and social development. It is a breakthrough for China's policy-making.

A sound social development aims to improve every citizen's living standard through a fair social security, educational, cultural and medical system. But China's current conditions display backwardness in this aspect.

(China Daily March 3, 2004)