BEIJING, May 31 -- Separated by just a few hours of flying time, World Bank Chief Economist Francois Bourguignon saw two very different sides to the country when he visited Shanghai and Sichuan last month.

    China is the biggest economic growth story of recent times. The flourishing, flamboyant skyline of Shanghai dazzles every first-time visitor.

    But while many east coast cities embody the nation's economic development as it gathers momentum, the flip side of the growth story is just as obvious - the vast income gap between some regions in the west that are falling far behind.

    "I am happy to see the Chinese Government has been paying great attention to solving the problem of social inequality," said Bourguignon, adding that the huge disparity between regions could lead to serious social and economic problems.

    China has been working hard to speed up the urbanization drive, raise farmers' incomes and reduce taxation in rural areas.

    One of the prerequisites for economic development is maintaining a secure and stable society.

    In addition, Bourguignon said, tackling inequality between regions is key to smoothing the path for national development.

    He said economic development can be compared to a two-lane expressway. If cars in both lanes move slowly at least everybody is equal, though they wish they were moving more quickly. But if cars in the left-hand lane start to move faster, as in the case of China's economy in eastern regions, drivers in the right-hand lane will want to move into the other lane.

    But Bourguignon did not indicate an immediate threat to the Chinese economy as "the level of income inequality in China is about the same as the United States and no one would question the future of the US economy."

    At a global level, China's anti-poverty campaign has undoubtedly been the single most important contribution to the reduction of world poverty in the last quarter of a century, but he suggested precautions should be taken.

    Bourguignon said unequal opportunity is the root cause of the rising income disparity. A simple case is that people living in more developed areas have more opportunities to receive better education and after graduation, these people are likely to gain access to better jobs, better pay and further education.

    Attracting investment is similar - richer regions always have greater access to capital.

    Even with adequate policies in place, the transition will be a long and painful one.

    Movements of labour and capital are limited so some people should leave poorer regions to improve their standard of living.

    By doing so, they contribute both to increasing the income per capita in the region and also make the workforce better adapted to more developed regions.

    (Source: China Daily)