Experts warn of wealth divide as China adds more billionaires

China may have the second-highest number of billionaires after the US but China should worry about the growing divide between the rich and the poor.

Published: 22nd March 2017 06:22 PM  |   Last Updated: 22nd March 2017 06:22 PM   |  A+A-

By PTI

BEIJING: China may have the second-highest number of billionaires after the US but the world's second- largest economy should worry about the growing divide between the rich and the poor, Chinese experts have warned.

The Communist Party government in China should closely monitor the country's wealth gap and focus on poverty relief,  experts said, as China has the most new entries on Forbes magazine's annual ranking of the world's billionaires in 2016.

The magazine published the ranking on Monday which had 196 new billionaires, of which 76 were from the Chinese mainland and 25 from the US. While the US has the single largest number of billionaires at 565, China followed with 319.

As of 2016, China had over four million people whose net worth was more than 10 million yuan (USD 1.5 million) and 150,000 with over 100 million, forming the biggest fortunes in the world, state-run Global Times quoted a report released by Fortune Character, a luxury consumption research agency. However, China's Gini coefficient, an inequality index where zero equals perfect equality, stood at 0.465 last year - higher that the 0.462 in 2015, said Ning Jizhe, head of the National Bureau of Statistics.

According to a report in the state-run Xinhua news agency, Ning attributed the higher index to slower pension growth for some urban groups and the negative effect of falling grain prices on farmers' income. The wealth gap was expected to narrow gradually as the government steps up poverty relief and pursues the development integration of urban and rural areas, he said.

"The Gini coefficient shows that China continues to suffer from a relatively high level of income disparity," said Wang Junhui, a research fellow at Chengdu-based Survey and Research Center for China Household Finance of Southwestern University of Finance and Economics. Li Chang'an, a professor at Beijing's University of International Business and Economics, said it was crucial to address poverty relief, if China is to reduce the wealth gap. China should create more jobs and raise incomes, as many Chinese categorised as poor were unemployed, Li said.

Although China is investing heavily to develop a sound social insurance system, it should further expand social security coverage, especially for rural residents and migrant workers, and have more people insured, Li said. A government work report this year says 12.4 million people in rural areas had been freed from poverty in 2016.

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