The average income for people working in the State sector rose by 16 per cent year on year to reach 5,000 yuan (US$630) for the first quarter of the year.

Meanwhile, the average income for the sector including employees working in governments, public-funded institutions and all companies (both private and State-owned) rose by 15 per cent year on year to reach 4,700 yuan (US$590) for the first three months of the year.

That was a five-year record, the National Bureau of Statistics said on its website on Friday.

There were more than 109 million people working in governments, public-funded institutions and State-owned/private companies last year.

For collective enterprises which are often set up with both private and public cash the average income for the three-month period rose by 15 per cent to 2,800 yuan (US$350).

Income growth averaged about 13 per cent in other sectors. There was no information about migrant workers' incomes in the report.

"It is noticeable that as China's economy booms, incomes for this group of urbanites are growing fast," said Zhuang Jian, a senior economist with the Beijing office of the Asian Development Bank.

He added that income hikes could help foster domestic spending and reduce the economy's heavy reliance on exports and fixed-asset investment.

But other experts warned that ordinary people, especially migrant workers, were still being poorly paid.

In the manufacturing sector, pay growth lagged behind GDP growth by about 5 per cent per year between 1998 and 2003, said Su Hainan, director of the Labour Salary Institute under the Ministry of Labour and Social Security. In some coastal areas, factories do not even have enough workers because of the low pay for migrant workers, he added.

Figures from the statistics bureau also showed that rural residents' average net income rose by 11 per cent to 1,100 yuan (US$140) for the first three months of the year.

Experts said the urban-rural income gap would keep growing.

According to the United Nations, Shanghai residents enjoy a standard of living on par with people in Portugal. Yet living standards in some of the most remote parts of China are closer to those in some poor African countries.

Incomes of laid-off workers have also dropped, but Xu Fengxian, a researcher at the Institute of Economics under the Chinese Academy of Social Sciences, said urbanites' disposable income was "enjoying the best period for years. The booming economy is fostering the rise of residents' incomes."

According to a survey released by the National Bureau of Statistics on Thursday of 56,000 urban families, per capita disposable income rose by 12 per cent in the first quarter, reaching 3,300 yuan (US$410).

Inflation-adjusted, that was a rise of 10.8 per cent, up 2.2 percentage points over the same period last year.

But Hao Jinmin, an employee at the Beijing-based National Library of China, said although people earn more, the cost of many things, from vegetables to houses, is rising.

(China Daily 04/29/2006 page1)

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