March 2, 2008 / 2:29 AM / 9 years ago

Growing rich-poor divide tests China's boom

ANKANG, China (Reuters) - Tom Tang and Dong Mijuan represent the two opposite ends of one of China's most glaring social problems -- the growing gap between rich and poor.

Economic reforms over the past three decades may have lifted millions out of grinding poverty and helped fuel a rising middle class, but those effects have not been felt equally across the country.

When President Hu Jintao and Premier Wen Jiabao came to power five years ago, they made narrowing that gap a priority, and it is certain to be an issue at the annual meeting of parliament which opens on Wednesday.

The stability-obsessed government worries that if this gap keeps growing, it will fuel social unrest and violence in the world's most populous nation, some 700 million of whose 1.3 billion people live in a vast and generally poor countryside.

In Ankang, a grimy city some 400 km (250 miles) south of Xian in the northwestern province of Shaanxi, 24-year-old Tang is one of the winners of China's bounding economic growth, despite his hometown's relatively remote location.

"I feel lucky that my family has had so much success," Tang, recently returned from study overseas, said in very passable English, standing outside a hotel his father's decoration company is fitting out.

"The rich here drive big cars and own two or three apartments. The poor can barely keep a roof over their heads or afford to send their children to school. The divide between the two is more and more obvious," he added.

Dong is at the other end of the scale.

Last year, he came back to Ankang from Beijing, where he had worked as a driver for the army, to look after his aged parents.

Unable to find a proper job, he works as an ad hoc taxi driver, and says he can rarely bring in more than a few hundred yuan ($28) a month to pay for food and medical bills.

"The rich get richer and we just get poorer," he said, waving at a gleaming new SUV with blacked-out windows passing on one of Ankang's rutted roads.

"Price rises are only making it harder for us," Dong added, reeling off a list of vegetable price hikes, symptoms of China's roaring inflation.

DISPARITY

To be sure, Ankang is not the poorest place in China, nor is Shaanxi.

That dubious distinction goes to landlocked southwestern Guizhou province, where the average annual net income of farmers, at just shy of 2,000 yuan ($281) in 2006, is about one tenth that of the average total income of city dwellers in booming Shanghai.

Over the last decade, while national per capita income for both rural and urban residents have both risen, it has gone up much faster in the cities.

Between 1997 and 2007, average annual per capita incomes in rural areas rose to 4,140 yuan from 2,090 yuan.

Over the same period, that figure went from 5,160 yuan to 13,786 yuan for farmers' city cousins.

Ankang, hemmed in by mountains and far from the sea, making it hardly a top choice for foreign or domestic investment, oozes poverty and disparity, even with a massive government works scheme to build roads and railways to ease the isolation.

In Ankang last year, farmers' average annual income was a paltry 2,256 yuan, up a sixth on 2006, a tiny sum but still one hailed by the city government.

"The whole city has jumped past the 2,000 yuan mark, the net increase has reached a historic high, and the growth rate is the highest in a decade," Ankang's statistical bureau said in a hopeful statement on its Web site (www.akstats.gov.cn).

Some people in Ankang have made money, and lots of it, mainly from mining to feed China's resource-hungry economy.

But their chic new sedans stand out in marked contrast to the much more dominant hand-drawn carts dragging everything from fridges to coal around the city.

New apartment blocks tower over run-down houses by the side of the Han River which runs through Ankang.

"Those places are not for us," complained Fang Zhilang, sitting cradling her newborn outside her simple brick home, the door opened to reveal an interior bare of all but the most basic necessities.

"They are for the rich. There are lots of poor here and few rich," she added.

In the provincial capital Xian, better known as home of the Terracotta Warriors, the gap between rich and poor is apparent in the beggars who roam the same streets where designer European clothes brands have opened outlets.

"The new rich here have no culture either. They made all their money from coal mines, and they think they can lord it over the rest of us," said Xian resident Xu Jinhong.

JEALOUS?

Yet there is little sign in Ankang of the unrest the government is so worried about.

Casual labourer Zhang Kun, washing laundry by hand in the Han River, made what could perhaps be considered a surprising remark when asked what he thought of Ankang's disparities.

"Of course, I would be lying if I didn't say I was jealous of the big cars being driven around by those rich guys," he said, as his two friends nodded their heads in agreement.

"It actually makes we want to work harder, so I can have a car like that one day."

Tang says he has nothing to be ashamed of for being what in Ankang counts as rich.

"It seems unfair that our family became rich when so many others in Ankang are so poor," said Tang, who drives a Volkswagen sedan and whose father, he proudly adds, has just bought a brand new imported Chrysler.

"But my father came from a poor background and worked his way up. He didn't even finish primary school."

($1=7.117 yuan)

Editing by Jerry Norton and Sonya Hepinstall

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