China's east-west income gap widens

The income gap has widened between the country's poorer inland regions and richer east, home to much of the nation's burgeoning IT industry.

In 2014, employees working in the "non-private" sector in eastern regions enjoyed the highest pay growth, at 9.7 per cent, earning an average of 64,239 yuan (HK$81,296) a year, according to the National Bureau of Statistics. Incomes in western regions grew by 9 per cent last year, with the average reaching 51,204 yuan.

That left a gap of 13,035 yuan between them, an increase on the 11,595 yuan seen in 2013.

Economists attributed the difference partly to the location of most technology and finance companies in eastern areas.

The non-private sector includes government units, state-invested companies, state-controlled enterprises and joint-stock units with government influence.

Employees in the financial industry in the non-private sector earned the most of 19 industries measured, with workers earning an average of 108,273 yuan a year, thanks to hefty trading in the stock market. IT came second, with average pay at 100,797 yuan.

Money has been flooding into mainland technology companies as private equity and venture capital firms bet on China's "internet plus" strategy to encourage IPOs by companies like Alibaba, Tencent and Baidu. It was the first time the average income in two industries surpassed 100,000 yuan, the bureau said.

Income differences between industries were huge. The agriculture, forestry and fishery sector's average was the lowest, with workers earning 28,356 yuan. The hospitality and catering sector was next, at 37,264 yuan.

The pay of urban workers grew at a slower pace last year as the economy decelerated. Salaries outside the private sector increased by 9.4 per cent, to 56,339 yuan last year - 0.7 percentage points lower than in 2013.

Income of private sector employees rose by 11.3 per cent, to an average of 36,390 yuan a year, with the growth rate 2.5 percentage points lower than 2013.

"The slowdown in economic growth weighed on income rises, but the overall growth remained stable," said Feng Nailin, head of the bureau's population and employment statistics department.

ANZ Banking economist Raymond Yeung Yue-ting said urban income growth would remain stable. "With the government's initiatives to encourage domestic consumption in an effort to foster economic growth, it's important for the government to support a rise in urban income," he said.