Rural shops show income gap's drag on Chinese economy
(Reuters)
Updated: 2006-09-05 14:17 MOVING OUT
To be sure, Beijing is investing record sums in rural infrastructure, has
abolished the 2,600-year-old agricultural tax and waived school fees in an
effort to lift incomes and give people greater confidence to spend more of what
they do earn.
To address food safety concerns, the commerce ministry has launched a drive
to attract urban retailers to rural areas.
That would help confront the symptom, but the root cause is low incomes, said
Lu Feng, an economics professor at Peking University. And the key to earning
more is prodding more people to move to urban areas. But an array of obstacles
means that is easier said than done.
"While it has been gradually improving, the institutional setting here
generally does not encourage migration," Lu said.
Tang and Kroeber agreed, saying it was essential that the government improve
educational opportunities in the countryside so people have the skills to thrive
if they move to the city.
"On the stimulating consumption side, that really is the game -- getting more
people into the urban economy at some level, even if it's a very low level,"
Kroeber said.
($1=7.9532 yuan)
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