China’s wealth gap widening

City residents have prospered since economic reforms were implemented 30 years ago, but many rural villagers have been left behind.

Millions of rural migrants are out of work, and on Tuesday, more than 1,000 workers clashed with riot police in eastern China over unpaid wages.

Civil unrest

With a population of 1.3 billion, China has far more people than jobs to be filled. But the country’s economic boom enabled  millions of farmers and their children to find work in factories and construction sites.

China’s leaders are struggling to bridge the rich-poor divide [GALLO/GETTY]

However, declining demand for Chinese exports has forced thousands of factories to close and newly unemployed migrants to stream from coastal manufacturing regions back to their rural hometowns.

Chinese officials have warned of protests and riots this year, as more workers are laid off and companies struggle to pay wages.

Deteriorating purchasing power in the rural areas could also hinder efforts to boost domestic consumer spending to help compensate for declining exports – a crucial part of the government’s strategy to prevent a recession.

City dwellers earned an average annual income of $2,300 a year in 2008, Chen Xiwen, a senior rural planning official, reported at a recent conference in Beijing.

The average rural income was about $690.

Incomes in Shanghai and some other big cities are about a third higher than the national average.