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    Reporters Without Borders said in it’s 2005 special report titled “Xinhua: the world’s biggest propaganda agency”, that “Xinhua remains the voice of the sole party”, “particularly during the SARS epidemic, Xinhua has for last few months been putting out news reports embarrassing to the government, but they are designed to fool the international community, since they are not published in Chinese.”
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China’s Income Gap Grows Despite Pledges

Posted by Author on December 27, 2006

By Geoff Dyer in Shanghai, The Financial Times, December 26 2006-

China’s widening income gap is approaching Latin American levels, according to a report by the Chinese Academy of Social Sciences, a state think-tank.

The development flies in the face of two years of efforts by China’s leaders to make addressing the gap between rich and poor a priority. Hu Jintao, China’s president, has pledged to promote “social equality”. Although the government has abolished an agricultural tax and pledged to expand the social security network in both rural and urban areas, it is under considerable pressure to announce more ambitious policies.

The think tank report is the latest by governmental or international groups to conclude that economic inequality is rising rapidly in China, despite the continued growth in the economy and the millions of people who have been lifted out of poverty.

In its annual report on social development in China, the Cass academics also warned rising medical costs were becoming an ever-greater problem and were pushing some back into poverty.

Based on a survey of 7,140 households, the Cass report concluded China’s Gini coefficient – a measure of income distribution where zero means perfect equality and 1 is maximum inequality – reached 0.496 this year.

Using different data sets, the World Bank said China’s Gini coefficient was 0.45 in 2005 while the State Development and Reform Commission, another government think-tank, put the level at 0.4.

In comparison, income inequality figures are 0.33 in India, 0.41 in the US and 0.54 in Brazil, where rapid industrialisation and urbanisation have also led to high levels of social inequality.

There is some disagreement among economists about the implications for China of rising inequality. Some see it as the inevitable result of rapid development in a continent-sized country where the coastal eastern regions are expanding much faster than more isolated western areas and where millions of poor farmers are moving to cities. Some studies suggest inequality in cities has not risen sharply. But academics also warn that such discrepancies in wealth could lead to greater social tensions and undermine support for further economic reforms.

According to the Cass report, rising healthcare costs have become a big concern among Chinese, with medical expenses now accounting for 11.8 per cent of household consumption, more than transport or education.

“This is a very high percentage, even compared to developed countries,” said Li Peilin, a sociologist at Cass and the report’s editor. “Soaring medical costs have plunged many rural and urban Chinese back into poverty.”

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