BEIJING: Inequality is on the rise in officially socialist China, with the poorest becoming even worse off, a report says, citing new research by the World Bank.

The real income of the poorest 10 per cent of the population declined 2.4 per cent in the period from 2001 to 2003, the Financial Times said, citing preliminary World Bank findings.

In the same period, China's richest 10 per cent saw their incomes rise by more than 16 per cent, the newspaper said on Wednesday.

“Preliminary analysis on Chinese data indicates that average income of the bottom (10 per cent) went down slightly between 2001 and 2003, whereas all other income categories saw significant increases,” Bert Hofman, the bank's lead economist in China, was quoted as saying.

He said the analysis suggested that a considerable number of people below the poverty line only managed to maintain current consumption by spending their savings.

The findings confirm the existence of a widening income gap, brought about by market reforms which have rewarded people with skills and personal connections, and punished those without.

The income gap is partly blamed for a rise in social unrest, especially in rural areas, and narrowing the gap is a high priority for the current generation of leaders who took over in 2002 and 2003.—AFP