The widening Gap between Farm and Non-farm Income
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China's GDP growth rate reached 8.7 percent in 2009 as announced recently by the National Bureau of Statistics (NBS). The data indicates not only the achievements of China's stimulus plan in the face of the worldwide economic recession, but also shows the persistence of China's leading role in the global economic recovery.
As we witness China's fast economic growth, we have also seen that the Chinese people are better off than at any time in history. Personal income, including both farm and non-farm income, has increased rapidly. The Chinese people are now enjoying higher income levels with low inflation, better health and more goods and services than ever before. The real non-farm, per capita, disposal income almost doubled within the six years from 2003 to 2009.
However, it is also a fact that the gap between farm and non-farm income has widened (see the following graph).
In 2009, farm per capita net income was RMB5153 (US$755), while non-farm per capita disposal income reached RMB17175 (US$2515), which is about 3.3 times of farm net income. From 2000 to 2009, farm per capita income increased 128.7 percent, while non-farm per capita disposable income increased 173.5 percent. The so-called rural-urban inequality, measured as urban-rural income ratio, increased from the 2.787 in 2000 to 3.33 in 2009.
As stated by Premier Wen Jiabao during the World Economic Forum hosted in Dalian on September 10, 2009, China must "narrow the gap in income distribution" and dramatically decrease inequality. Last month's Central Conference on Rural Work also focused on how to stimulate rural consumption and raise rural living standards to promote economic growth and ensure social stability.
