The income gap between the rich and the poor in China Research Paper

The income gap between the rich and the poor in China - Research Paper Example Over the last decade, China has exceeded the Gini coefficient index threshold by 0.4 close to the warning level given by the United Nations (Cai, 128). This article analyzes the extent of the income disparity in China between the rich and the poor, it cause and effect and the plausible solutions to this problem. Research has shown that income disparity in China between the rich and the poor have continued to increase since 1978 when China opened it boundaries for trade with the rest of the world. According to the China national bureau of statistics, the standard income earning of the 10% richest people in china was 10.9 times higher compared to that of the 10% poorest in the year 2009. In 1985, the figure was just 2. 9 times ((Anon, 148). It can be seen that the gap between the poor has thus increased incredibly. Since 1978 when China opened it door to international trade, per capital income has increased unbelievably. For instance, within the period of 1985 to 2010, the per capital income has increased by 55 times. This has however come from the urban area with the rural area experiencing lesser growth. The earning gap between the rural and city dwellers had reduced from 2.6 to 2.5 times in the 1970 and from 2.3 to 1.9 times in the 80s. However, it widened to 3.3 times in 2009. This is disregarding the fact that there are some social amenities such as good roads, health care house subsidies and other amenities enjoyed by the city dweller which are not available to the rural people further increasing the disparity (Cai, 130). This thus implies that the disparity many even be more than six times larger. The major obstacle in overcoming the income disparity issue is because the affluent have a greater opportunity of increasing their wealth compared to other people. For instance, from 1985 to 2010, the rich recorded a 38 fold increase in their earnings; the people in the middle class register a 21fold increase while the poor only