Of all the problems posing a grave challenge to China's economic and social development, one of the most serious is the widening gap between the rich and poor.

The government and sociologists have, for a long time, been talking about the large gap between the country's urban and rural areas and between the booming coastal regions and underdeveloped western regions.

But a more worrying and also dangerous trend is the much sharper gap in incomes in Chinese cities.

A recent survey by the National Bureau of Statistics found that earners in the highest-income bracket in cities earned 11.8 times more than those at the other end of the scale in the first quarter of this year.

In stark contrast, the figures were respectively 4.16 and 5.7 in 1996 and 2000.

Meanwhile, statistics from the Ministry of Labour and Social Security also indicate that the richest 10 per cent of households own 45 per cent of urban wealth.

The poorest 10 per cent of urban households have less than 1.4 per cent of the wealth in Chinese cities.

All these figures and statistics point to a yawning gap between the urban rich and poor, as well as the emergence of an impoverished group in Chinese cities.

The Beijing News recently quoted some researchers as saying slums have quietly come into existence in the capital city.

Urban poverty has been increasing since the mid-1990s although the Chinese Government has successfully reduced rural poverty.

Now there are mainly three groups of urban poor. They are the disabled and elderly without family support, jobless workers and migrant workers.

Given the absence of a sound social security system in the country, the rich-poor gap among Chinese urbanites may become more threatening.

Currently, China is pushing for urbanization as part of its modernization bid. If the rich-poor gap continues to grow, it will hinder the development of Chinese cities.

A widening gap between the rich and poor in cities may result in a multi-level urban society and cause confrontation between different groups.

The problem could breed more unstable factors which could endanger social stability and public security.

Many factors soaring unemployment, the reform of State-owned enterprises and the migration of surplus rural labourers into cities -- have contributed to the rich-poor gap in cities.

The government, however, is mainly to blame for its failure to ensure equal opportunity and wealth distribution and give enough help, in time, to the urban needy.

For instance, it has yet to reform the outdated personal income taxation system, which was introduced as early as 25 years ago, despite growing calls for such a move from the public.

Governments at all levels have given too much priority to GDP growth.

During development, economic efficiency and the principle of equality should be balanced. Urbanization should not be at the expense of the interests of the poor people.

Premier Wen Jiabao spoke of the "Economics of the Poor" earlier this year, when asked how the government will improve the lives of millions of poor farmers.

Now, since the poor have moved quickly into urban areas, it is time for the government to take more action. The sooner this happens, the better off we will all be.

(China Daily June 21, 2005)