New York - China's economic growth, which has been hailed
for fighting poverty, has actually created more inequality between
the rural and urban areas, the UN University said in a study
published Thursday.
The study said growth alone cannot reduce poverty and recommended
that China allow cities to take in more poor migrants from rural
areas in order to try to close the rural-urban gap in economic
development, which has grown since the early 1990s.
'While growth in China has been hailed as a miracle and its impact
on poverty is well-recognized, its growth-biased development
experience has led to a fast rise in inequality,' the study said.
Inequality has caused a series of economic, social and political
problems in the country of 1.3 billion people, it said.
While the economic miracle happened mostly in coastal regions and
big cities, the poor in inland regions lack purchasing power and
rural residents contribute to a sluggish domestic demand. But China's
low labour costs have helped its exports expansion, the study said.
The study conducted by Guanghua Wan, an economist at universities
in Sydney and in China, and Terry Sicular, who teaches economics at
Canadian universities, was backed by the Finland's World Institute
for Development Economics Research of the UN University.
It called on China to promote foreign trade and investment in
inland areas now that foreign investments were being phased out in
coastal regions. Public research and development funding in
agriculture should also be increased to improve farms' productivity.
China now has a surplus of rural population of 500 million,
including 100 million laborers who should be allowed to legally
migrate to cities to find employment, the report said. The study
cited as examples several large cities - Tokyo, London, Sydney, New
York and Mexico - that have been able to accommodate 10 per cent or
more people.
The study said Shanghai, with a population of more than 18 million
people in 2007, could accept a larger population, possibly up to 50
million as suggested by some leading Chinese economists.
USA
Your Talkback on this Story