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China Warns Gap Between Rich, Poor Is Feeding Unrest

By Edward Cody

Washington Post Foreign Service
Thursday, September 22, 2005; Page A16

BEIJING, Sept. 21 -- China's official media warned Wednesday that the gap between rich and poor has become alarmingly wide during two decades of economic liberalization, contributing to spreading unrest in towns and villages across the country.

While the income disparity, particularly between farmers and city dwellers, has been widely discussed and reported, simultaneous and extensive reports by the New China News Agency and the Communist Party's main organ, the People's Daily, suggested that officials wanted to call particular attention to the problem.

Riots and other violent protests, which the government acknowledges are increasing dramatically, have become a major issue for President Hu Jintao's government. Hu and Premier Wen Jiabao have made calls for "harmonious society" and "social stability" watchwords of their speeches over the last year.

The reports on income inequality seemed to attribute violence to economic rather than political causes and warned that more unrest could be coming. Following this reasoning, the Standing Committee of the People's Political Consultative Conference, one of China's two legislative bodies, declared in July that the widening income gap "is the root cause of disharmony."

Some senior officials in Hu's government think that the economic reforms begun in the 1980s have gone too fast and that more attention should be paid to the people left behind, according to Chinese academics with ties to the government. Yang Zhaohui, a political specialist at Peking University, said the focus on income disparity shows that the government and Communist Party take the issue seriously.

"I think the purpose of these signals is to give the society a warning," Yang said. "The government might bring out some policies to mitigate the problem."

Since taking over 2 1/2 years ago, Hu and Wen repeatedly have emphasized concern for the poor, but without repudiating the movement toward a market economy. They have, however, sharply curtailed the sale of state-owned enterprises. Shutting down money-losing government factories may make sense economically but often results in large-scale layoffs. Those layoffs frequently generate protests by workers suddenly deprived of the health care, lodging and other benefits they were accustomed to under the socialist system.

The reports on Wednesday gave added weight to the subject by citing the Study Times, official organ of the Communist Party's prestigious Central Party School for training young officials. In an article last week, Study Times suggested that a major reason for the unequal distribution of wealth and opportunity was the alliance between party officials and private businessmen that has grown since the party abandoned doctrinaire socialism and made swift economic growth its main mission.

"There are many people, especially upstarts, who gained wealth through collusion with officials in power-for-money deals," said the writer, Che Haigang.

Chinese often complain about such corruption and about alliances between politicians and private businessmen who have stakes in joint economic development projects. This concern is frequently mentioned by rioters and demonstrators.

The Party School paper based its comments on a Labor and Social Security Ministry study published last month that said China's income gap could cause "destabilizing social phenomena."

According to U.N. statistics, the poorest 20 percent of China's 1.3 billion citizens account for only 4.7 percent of total income, while the richest 20 percent account for more than half. Moreover, that gap has been widening steadily over the last three years. It was cited as China's most serious social problem in a survey conducted by the Central Party School last year.