China’s Rural Areas Boom as GNP Jumps 11%

Most of China’s 800 million peasants enjoyed a sharp increase in living standards during the past 12 months, while urban families barely kept pace with accelerating inflation, according to official statistics released Tuesday.

Consumer prices in June stood 19% higher than they were in June of 1987, Zhang Zhongji, a spokesman for the State Statistical Bureau, said at a news conference. This marks by far the highest level of inflation for a 12-month period since the 1949 Communist revolution.

But the Chinese economy is booming, with the gross national product for the first half of 1988 up 11% over the figure for the first half of 1987, after adjustment for inflation.

The figures reflect the intensification of a decade-long trend by which economic reforms have improved the quality of life in the countryside more rapidly than in the cities.

The strongest growth is taking place in rural areas, where prices paid for farm products are rising, and small-scale privately and collectively owned industries are rapidly expanding.

Most of the wage and price statistics released Tuesday, rather than comparing the level in June of this year to June of 1987, compared the average level for the first half of this year to the average level for the first half of 1987. This method of comparing longer periods of time is common in Chinese economic statistics.

Zhang said that, using this system, retail consumer prices during the first six months of this year were an average of 13% higher than during the first six months of last year. The overall increase in the cost of living was nearly 15%, he indicated.

Per-capita cash income in rural areas during the first half of this year was 25% higher than the average for the first half of 1987, Zhang said. After accounting for inflation, peasants averaged an increase in real income of slightly more than 10%, he said.

Wages received by urban workers, including various cash subsidies, during the first half of this year were 17.2% higher than the figure for the first half of 1987. But urban living costs, measured the same way, increased by 14.4%. This left city families, on the average, with only a slight increase in real income, Zhang said.

According to official statistics, per-capita annual income of peasants in 1987 was 463 yuan, or $125, while urban per-capita income was 916 yuan, or $247.