A think-tank study has highlighted the growing problems faced by low-income urban residents, particularly those in the country's biggest cities.

In Beijing, the minimum wage in 2004 was 545 yuan (US$67.2) per month, just 20 per cent of the city's average income. Added to this, the amount earned was barely half the average monthly living expenditure of 1017 yuan (US$127).

In Shanghai the situation was not much better: The minimum wage was 635 yuan (US$78.2), just 25 per cent of the city's average income.

In 1994 the disparity was less marked, standing at 39 per cent and 36 per cent in Beijing and Shanghai respectively.

Between 1994 and 2004, average incomes in the two municipalities grew at an annual rate of about 15 per cent, while China's economy grew on average 9.5 per cent.

Researchers, from the Income Research Institute of the Ministry of Labour and Social Security, based the report on statistics from the 1994-2004 period.

"We are quite concerned that low-income groups have not benefited equally from the country's economic achievements," Liu Junsheng, one of the report researchers, told China Daily.

Liu said in several provinces, such as Jiangxi and Qinghai, the minimum wage level has not risen at all in the 10-year period, after price rises have been factored in.

"This has further enlarged the income gap, which may become a threat to social harmony."

Liu said minimum wage levels nationwide were "too low" and "our strong recommendation is to give them a quick hike."

China has no nationally prescribed minimum wage, and instead it is up to provincial-level governments to set and adjust levels.

Widely accepted international standards say that the minimum wage should be between 40-60 per cent the average income. The study shows that China is falling well short of this standard.

"This level of income cannot sustain basic living needs," said Liu.

The researchers found that the monthly minimum wage in 2004 in 25 provinces, autonomous regions and municipalities was less than local average monthly living expenditure .

The situation was most acute in Beijing with a gap of 472 yuan (US$58), while in Shanghai it reached 418 yuan (US$51). In economic hubs such as Zhejiang and Guangdong provinces the gap ranged from 200-300 yuan (US$25-36).

"The gap means that the families of the minimum earners cannot meet their basic living needs," said Liu.

Several days ago, the institute issued a warning that the country was currently in a state where the government should be on high alert. It said that by 2010 the disparity could become "unacceptable."