China's huge poverty gap slowing growth, UN says Tania Branigan in Beijing

http://www.guardian.co.uk/world/2008/nov/17/china-poverty-united-nations-growth

China's huge poverty gap slowing growth, UN says
Tania Branigan in Beijing
Monday November 17 2008
The Guardian


The gulf between rich and poor in China is affecting growth by
deterring consumption and holding down productivity, according to a
report released by the United Nations Development Programme.

It tracks the vast and increasing gaps between rural and urban areas
and regions of China - warning that differences in income are matched
by disparities in social welfare, education and elderly care.

While Beijing and Shanghai have reached the development level of
countries such as Cyprus and Portugal, provinces such as south-western
Guizhou are comparable to Namibia or Botswana.

The Human Development Report argues that pressing ahead in providing
basic healthcare, education and welfare to all Chinese citizens will
boost the country's economy in the face of the global slowdown.

Chi Fulin, one of its authors, told reporters: "Equalisation of basic
public services is an important condition for expanding domestic
demand and maintaining steady and rapid economic growth."

China's president, Hu Jintao, told the G20 summit in Washington this
weekend that his nation's continued fast growth was its "important
contribution" to steadying the global economy.

The government has announced a 4tn yuan (£395bn) stimulus
package, which will include higher spending on public services and
infrastructure, though details are not yet clear.

Khalid Malik, UN resident coordinator and UN Development Programme
resident representative in China, praised the government's commitment
to increasing services.

"These timely actions can make people feel more secure to consume and,
in turn, help realise China's urgent goal of keeping a high economic
growth rate," he said.

"China now has the resources to make equitable provision of key public
services to all China's people a reality."

The report, by authors from the China Institute for Reform and
Development and other thinktanks, describes the nation's progress over
the past 30 years of reform as "a miracle in the history of poverty
reduction".

Economic growth has benefited even the poorest groups in society. But
it warns that reforming public services is necessary too. Urban
residents enjoy far higher levels of government funding than those in
the countryside.

According to the UN human development index - which measures health,
knowledge and income - China has made dramatic gains for its citizens,
climbing from 101st to 81st in the global rankings between 1990 and
2005.

But life expectancy in Guizhou is a decade shorter than in Beijing;
child mortality in Qinghai is seven times as high as in the capital;
and illiteracy in Gansu five times more common. Spending also varies
widely: the average public funding rate per student for primary and
junior middle schools in Shanghai was about 10 times that of central
Henan province.

Copyright Guardian Newspapers Limited 2008