CIEM, Trung tm Thng tin T liu 5 Moreover, these indicators are not immutable, if promoting economic growth isnotassociatedwithensuringsocialsecurityandjustice,itisunlikelytoreach sustainabledevelopment.Incalculatingrichandpoordisparity,socialdivision consists offive income groups: 20% high, 20% well, 20% medium and 20% poor. Withoutappropriatemeasurestopromotethe20%povertygroup,suchas conductingprogramsofsocialwelfarepolicyandpovertyreduction,and preferentialprogramsforthedisadvantagedareas,inaccompanywitheconomic restructuringsolutiontoshortentheincomegapbetweenregionsandbetween sectors in the economy, the rich-poor gap will defenitely continue growing. II.China's experience in reducing the income gapFollowings are some major learnt lessons withdrawn from the analysis in the working-paper: Itpossibletoseethattheformationandincreaseoftherichandpoorgap betweenurbanruralareasinChinaisresultedfromunproperdevelopment policy.Inparticular,thegovernmentisresponsiblleforsuchmistakes.Inother words, the gap between rich and poor in general, and differences between urban - ruralareasinparticular,arenottheresultofmarketizationprocess.The interventionofgovernmentindevelopmentplanning,overconcentratinginurban areas,thepersistentinhabitantregistrationregimeofpeasanthouseholdvariables haveturnedpeasantsinto"secondclassedcitizens";furthermore,weaknessesin regulatoryfunctionsofincomeredistribution,etc...isthebasiccauseofsuch disparity.So,basicdirectionsinnarrowingtherich-poorgapinurban-rural shouldfocusoninstitutionalreformandgovernmentalmanagementreform.In particular, it is necessary todirect governments transitional and/ or consumption expendituresto non-economicprojects(i.e.:investments ineducation,health care in rural areas, subsidies for farmers, and welfare system, etc. ..). To allow free demographic movement , and to remove inhabitant registration regime will enable rural people to settle down and enjoy the social policy as urban residents.Thisisasmallbutimportantandpracticalsteptocreateequal opportunitiesforruralpeople,andabolishingurbanruraldiscrimination. Thereisanintimaterelationshipbetweenlevelsofindustrialization,urbanization and urban rural wealth gap. In general, the acceleration of urbanization process is conducive to narrowing wealth gap between urban and rural areas in China.