The gap between the poor and the rich is increasing and China is on the verge of severe income inequality, even though wages have risen in rural regions for more than six straight years, officials told an Expo forum yesterday in Shaoxing, Zhejiang Province.

Delegates said capital support, land and residency policies as well as skill training and education can help solve the income gap between the two groups.

In the first half of this year, the average income of people in rural regions jumped 9.5 percent year on year. The average peasant's income increased to 5,153 yuan (US$757) last year from 2,622 yuan in 2003, according to Zhang Xiaoqiang, vice chairman of the National Development and Reform Commission.

"The income gap, however, is still growing. It has had a big impact as China tries to become a well-off society," Zhang told the forum, which focuses on the theme "Economic Transformations and Urban-Rural Relations."

Li Yang, vice president of the China Academy of Social Sciences, agreed.

China's Gini coefficient, a measure of the inequality of a distribution, was 0.475 in 2007, the latest figure available. The figure was close to 0.5, which represents extreme income inequality, according to Li.

Eric Maskin, professor of Princeton University, defined the income inequality as a "side effect" of China's rapid economic development. "It's a transitional and temporary problem," said Maskin.