China's Gini coefficient, a standard measure of a country's overall income inequality, rose to 0.473 in 2004 from 0.4 in 1993, according to a report by the Asia Development Bank (ADB) released on Aug 8th.
It is the latest figure for assessing income disparities and crosses the international warning line of 0.4.
A coefficient of between 0.3 and 0.4 is generally deemed normal, but the larger it is, the more serious the inequality.
Government officials have said the coefficient was not accurate in reflecting China's inequality level, as it does not take into consideration of the country's regional gap in consumption.
People in many regions, they said, although earning much less than those in prosperous regions, pay much less for equivalent commodities, such as housing.
But it is undeniable that China is experiencing a very serious income disparity due to its flawed income distribution. Much of the so-called "grey" or hidden income of Chinese people was not included in the official figures, which, if it was, might further push up the coefficient.
Despite its high Gini coefficient, the ADB's chief economist Ifzal Ali acknowledged China's efforts to improve the well-being of the poor.
China's dibao (policy) is a step "in the right direction", he said at a news conference yesterday to launch the Key Indicators 2007 report.
China started to establish a minimum living allowance system, dibao, in urban areas a decade ago and has spread it to the rural region, in a bid to guarantee a minimum standard of living for the poor.
To help the poor, the ADB suggested more public investment should be made in agriculture and the poor should be granted easy access to basic health services and primary education.
Synocus’s comment: Serious income disparity will harm the social stability, investment environment and economic growth. Many acts have been taken in China to prevent further disparity. How to solve the unharmonious wealth accumulation speed in different social groups is the most challenging issue faced by the Chinese government. Economic development, relevant tax and financial supporting polices are the most common methods to narrow the disparity. Besides these methods, more humane care towards the poor is strongly in call too.