January 04, 2008	Friday	Zilhaj 24, 1428

BEIJING: China’s more than 700 million farmers are happier than before despite a growing wealth gap, while poor urban residents are being squeezed by rising food and property prices, a top government think tank said on Thursday.

Chinese farmers’ satisfaction level has risen but that of urban dwellers has dropped, both due to a jump in food prices, which has driven up rural incomes but people in towns and cities have to spend more, researchers say.

Annual consumer inflation is running at the quickest pace in over a decade, driven largely by a spike in food prices, which has pushed a government fearful of social unrest to pump up agricultural subsidies and tighten food exports.

“Prices rises have had a large impact on the lives of urban residents, yet they have been of some help to rural residents,” said Li Peiyuan, editor of the Chinese Academy of Social Sciences 2008 Society Bluebook report.

Still, it would be better if prices were brought under control, he told a news conference, carried live on government website www.china.com.cn.

“Controlling food prices and maintaining their stability are extremely important foundations for our social stability,” Li said.

Last year the government, wary of student activism, ordered local authorities to give more help to university students struggling with soaring food prices after several campus canteen boycotts in protest at the surging cost of meals.

The government is also trying to tackle a growing rich-poor, urban-rural divide, another cause of the rise in incidents of social unrest and violence in the world’s most populous nation.

Even with a growing skills shortage, university students were paradoxically having a harder time finding work, added Yang Yiyong, deputy head of the National Development and Reform Commission’s Socio-Economic Research Institute.

At Beijing’s elite Tsinghua University, only 1 per cent of graduates set up their own companies, compared to a quarter of US college graduates, he added, suggesting that it was a problem with China’s learning-by-rote culture.—Reuters