BEIJING — China’s government reported the scale of the wide gulf between its rich and poor for the first time in 12 years Friday and said it urgently needs to narrow the politically explosive gap.
Beijing failed to report the widely used Gini coefficient for income distribution for a decade as complaints about the income gap mounted during China’s fastest growth on record. That prompted suggestions that the ruling Communist Party might be trying to downplay the gap between an elite who benefited from more than three decades of reform and the poor majority.
The Gini figure is based on how much of a country’s income goes to each economic level of society. The index ranges from zero for complete equality to 1 for perfect inequality. It also can be reported on a 100-point scale.
China’s Gini coefficient was 0.474 last year on a 0-to-1 scale, down from a high of 0.491 in 2008, said the director of the National Bureau of Statistics, Ma Jiantang. That would make China among the world’s most unequal societies. By comparison, Ma said Brazil’s Gini number was 0.55, Argentina’s 0.46 and Russia’s 0.40.
“We must focus on income distribution,” Ma said at a press conference. “On the one hand, we need to make the cake bigger, while on the other, we need to do a better job of sharing it.”
Narrowing the income gap is a pressing issue for new Communist Party leaders who took power in October. The government is rumored to be preparing to release a long-range plan to reduce inequality but there has been no official confirmation.
The latest announcement follows two years of improvement in income distribution that Ma said was due to higher social spending and government efforts to improve life for the poor. Private-sector economists say, however, that much of the rise in income for China’s poorest is due to wage hikes prompted by labor shortages.
China’s boom has made multibillion-dollar fortunes for some entrepreneurs but income growth for the majority has been sluggish.
The government last issued a Gini number for 2000. Since then, Ma’s agency has said it knew too little about incomes of wealthy households to make a calculation.