China’s income gap between rural and urban residents will continue to widen according to a report published by central government think-tank, the Chinese Academy of Social Sciences, China Business Net reported (in Chinese). The academy’s 2008 Blue Book on Social Development says average urban disposable incomes rose 13.2% to US$1,420 in the first nine months of 2007, once adjusted for inflation. Average rural incomes came to US$456 over the same period and the report predicts a full-year rise of around 8%. This is the highest growth rate seen in years and, while government efforts to boost rural incomes have played a role, rocketing inflation is the major driver. The academy’s Li Peilin said that government efforts on education and health care and tax breaks had boosted rural confidence, but that rising prices remained a key concern. The report also highlighted unemployment among university graduates, finding that 1 million out of 5 million new graduates in 2007 could not find jobs.