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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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8% of China’s Workers Earn 55% of Income

Posted by Author on July 30, 2009

By Xie Wong, Radio Free Asia, Via The Epochtimes,  Jul 30, 2009 –

A recent study reveals China’s per capita income gap reaches 55-times the difference between the rich and the poor, a number far beyond the official figure. The researcher believes that both corruption as a consequence of the ill-conceived system and gray income of special groups of population contribute to this gap.

In a recent publication entitled, “Distribution of national income and gray income,” deputy director of National Economic Research Institute, China Reform Foundation, Wang Xiaolu concludes that the official average income figure is obviously distorted and lower than the actual figure due to all practical difficulties during the survey, especially the considerable amount of gray income obtained by the rich. Gray income includes income of illegal, non-disciplinary, questionable, and undisclosed sources.

The report is based on a 2005 to 2006 survey of income of more than 2,000 households in urban and rural China. The data revealed that in the year 2005 average disposable income for the top 10 percent with high income (a total of 19 million households and 50 million people in China) is 97,000 yuan (US$14,197) per person, three times higher than the official figure, 29,000 yuan (US$4,244). The national hidden income totals 4.4 trillion yuan (approximately US$644 billion), which is equivalent to 24 per cent of China’s GDP.

The study finds that the top 10 percent households hold the up to as high as 75 percent of total hidden income. The actual difference of per capita between the top 10 percent and the bottom 10 percent in urban areas is 31 fold instead of official figure of 9 fold. The difference in per capita combining both rural and urban is calculated to be 55 fold between the top 10 percent and the bottom 10 percent, rather than the 21 fold projected by the official statistics. The report also indicates that due to insufficient data, the Gini coefficient is hard to finalize now, but surely reaches the inequality warning standard, 0.45, used by the World Bank.

Cai Chung-Guo, an expert in Chinese labor issues, comments on the wide per capita income gap in China:

“The income gap in China is significant. It reflects several issues. One of them is the unreasonable economic structure, i.e., the incomplete market structure. The Chinese government monopolizes the banks, energy, and so forth, in the market and causes a deformity of the market. These industries earn more because the state protects and monopolizes them. There is no transparency.”

The report reveals that significant gray income exists in urban high income households. According to both partial and public information, the analysis suggests the following gray income sources.

First, serious management loopholes exist in governmental payment allocation channels. The majority of fundings suffer from low transparency and loss by misuse and abuse.

Second, financial corruption prevails.

Third, periodic payment-seeking by officials takes place by controlling government licensing and administrative approval fees.

Fourth, land expropriations promoted by developers has become the main gray income source for real estate and associated officials.

Fifth, the income of monopolized industries prevails. In 2005, there were a total of 8.83 million workers in electric, telecommunications, petroleum, finance, insurance, water, energy supply, tobacco, and so forth. They make up less than 8 per cent of the total workers in China, and earn total income of 1.07 trillion yuan, which is equivalent to 55 per cent of the total national workers’ income, and a total of 920 billion yuan more than the total of national average wage. The administrative monopoly has contributed substantially to this inequality……. (more details from The Epochtimes)

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