AN expanding disparity between rich and poor is the main revelation in the latest version of the “China Development Report of People’s Well-Being,” released over the weekend by the Institute of Social Science Survey of Peking University.

The report considered family assets, consumption habits, medical expenses, housing and self-employment, and added a subjective view of happiness.

The report, which used data from 2012, reflects the gains and losses of Chinese individuals and families under the nation’s rapidly changing economic and social development.

The results show that the top 1 percent of Chinese families own more than one-third of total family assets in the country, and that the disparity is growing rapidly. Conversely, the bottom 25 percent in China own just 1 percent of total family assets.

In 1995, China’s Gini coefficient — a widely used measure of a country’s inequality — was 0.45. That grew to 0.55 in 2002. In 2012, it had soared to 0.73. The higher the number, the more unequal the distribution of wealth. A reading of 1.0 would mean one person owns 100 percent of a nation’s wealth.

Family assets affect happiness

The report indicates that assets and income greatly influence a family’s overall happiness toward life, with the influence on women stronger than that is on men.

Professor Xie Yu, the report’s author, says it reveals a nation lacking balance between its urban and rural residents.

The economic inequality poses a series of social problems that are at the root of social conflicts, he says, adding that more concern and research are needed to avoid a vicious circle that continues the trend.

The inequality in family assets is more pronounced than the inequality in income, and the dramatic difference between the city and countryside is a critical reason for such inequality.

Interestingly, the report revealed that the assets of families in the middle are growing fastest, while growth is slow for families at both the low and high ends.

Different consuming modes

Based on the report, the consumer habits of Chinese families can be divided into five categories: poor, ant, snail, stable and indulgence.

Poor families often are plagued not only by poverty but also by disease, and, as a group, spend the highest percentage of their incomes for medical expenses. Of the five groupings, they spend the  lowest percentage of their incomes on consumer products.

The consuming ability of those in the “ant” category is also quite slow, similar to laborious ants and just a step ahead of the poor.

Things are only slightly better for those in the “snail” category, which refers to families with heavy financial pressures. Although the snails can spend some money, they aren’t able to spend large sums on their daily life, entertainment or luxury items. Most of their money goes to mortgage, education and medical expenses.

The report put middle-class families in the stable category. Their spending on consumer products is higher than the national average, while their medical and housing spending is lower than the average.

The indulgence category refers to families that enjoy a high-quality material life. In terms of percentage of income, their expenses on education and entertainment are much higher than the other categories, but are fairly low on medical care.

Overall, the report paints a picture of households going in opposite directions: The poor, ants and snails are heavily pressed just to pay bills for medical care, education and housing and have little left over for food and other expenses. That leaves the stable and indulgence families able to enjoy a comfortable or even affluent material life.

A big urban-rural gap has most of the poor families living in the countryside, where only a few stable and rich families live, while most of the indulgence families live in cities, and fewer poor people live in urban areas, as well.

Jobs are an obvious reason for this, as urban salaries are about triple what they are in the countryside. That is a primary reason for China’s urbanization drive and a key to pushing hundreds of millions of people into the middle class over the past 20 years.

Real estate is crucial

The report says that real estate represents nearly 80 percent of urban family assets in China, and about 60 percent of the assets of rural households.

Years’ worth of rapid inflation in housing prices lies behind this statistic. In the countryside, houses are often built by the farmers themselves, and land costs are much lower. Housing pressures for urban families generally are much heavier than for those in rural areas.

High medical care

According to the report, medical expenses constitute nearly 11 percent of a family’s budget, a figure that is higher than that in industrialized countries.

Compared with 2010, families spent more on medical expenses in 2012 but the percentage of their overall expenses decreased due to higher incomes.

Urban residents face greater pressure on medical expenses than their country brethren because medical care costs more in the cities.

Different voices

Jimmy Zhang,

43, clerk at a multinational company

“My family assets are the several apartments that I bought in the last decade. Frankly speaking, I don’t have a big saving; all of the family income becomes our fixed assets, which proved to be quite correct. The value of these apartments already exceeds 20 million yuan. I feel lucky that I caught the golden chance in my life.”

Zhu Yi,

60, retiree

“I am quite worried about my future expenses on medical care. Do you know how costly it will be to have a surgery at a hospital today? Last year, I had a bypass for my heart, and it cost 50,000 yuan (US$8,000). But my retirement pension is only about 3,500 yuan a month. I don’t want to add any financial burdens to my children. So my husband and I are quite frugal in our daily life, as we have to save some money for future medical care expenses. Anyone will be aged, will get diseased; you must prepare for it before it happens.”

Jiang Yulan,

38, ayi (domestic helper) from Anhui Province

“Although my husband and daughter are now working in Shanghai, it is impossible for us to buy any fixed assets here. We still rent a shabby and small apartment. I’m one day my husband and I will return to the countryside where we have our own house. Now I just pray that we stay healthy. We all understand that today a big disease could ruin a whole family.”

Peter Li,

33, financial consultant

“Now I only have one apartment where my family lives. I already sold out my two apartments two years ago. Frankly, I am not so confident in the economy. I believe that cash is king. You might not believe my words, but let’s just wait and see.”

Jiang Xiaoyue,

24, fresh graduate from Changsha, Hunan Province

“Family assets? No, I only have 10,000 yuan in my bank account. My life has just started in Shanghai with my first job. I don’t know whether I can buy an apartment in the city in the future. Now the biggest problem for me is how to make ends meet. The pressures on my shoulder as an outsider is beyond your expectation. I wish that I could find my Mr Right to share it with me.”