In his village of Sanbaihu in the northwest, he sees the same desiccated landscape that has changed little in his 46 years. A rutted dirt track winds through treeless mountains to the county seat 48 kilometers away, the outermost boundary of his experience. Watermelon plants emerge reluctantly from chalky soil, waiting for rain that may never come. A wood stove occupies his mud floor, painting his walls with soot.

But Wang's world is far from cocooned from the larger forces shaping his country's fortunes: in the 3½ years since China's World Trade Organization entry, aggressive industrialization, combined with an outpouring of consumption, has jacked up prices for everything, roughly doubling the average cost of living here.

Those within reach of the booming coastal cities have been compensated with job opportunities that have lifted millions out of poverty. But that upside remains beyond this rural community and thousands of others like it across this still predominantly peasant country.

The costs of food and growing watermelon have climbed faster than what Wang receives for his crop. Income has slipped by 20 percent over the past five years, to about US$300 (HK$2,340) a year.

``Our lives are more and more difficult,''he said. ``Every year, it gets harder.''

A recent World Bank study found incomes among rural Chinese - about three-fourths of the population - have dipped since WTO entry, while urban residents have enjoyed modest gains.

Economists say this trend underscores the downside of globalization: free trade, while highly efficient in generating wealth, has intensified gaps between rich and poor, urban and rural. In many cases, new wealth is coming at the direct expense of the poor as local governments sell off land for development projects.

``Industrial companies gain the profits while rural people lose their basic livelihood,'' said Wen Tiejun, dean of the School of Agricultural Economics and Rural Development at People's University.

The rich-poor divide is greater than before 1949. Last month, Beijing announced it has widened in the first three months of the year, with the richest 10 percent of the population controlling 45 percent of the country's wealth, and the poorest 10th holding little more than 1 percent.

In Beijing, concern is rising. Protests have become near-daily occurrences as farmers protest loss of land to development and excessive taxes. In response, China has rolled back taxes on peasants.

Last year, the State Council released a document outlining a strategy aimed at closing the gap, including development funds aimed at stimulating business in poor areas. President Hu Jintao and Premier Wen Jiabao are frequently quoted as pledging to alleviate poverty.

Some worry that rural poverty is a potential threat to the overall economy. China is beset by a surplus of production, which policymakers are banking on domestic consumption to absorb.

``Rural areas have no spending power,'' said East China Normal University sociologist Yu Nanping in Shanghai. ``If farmers have no money, then who is going to buy all these home appliances and cars?''

The World Bank study notes that rural incomes were already declining before WTO entry.

But the linking of China's fortunes to foreign markets has apparently aggravated the trend, particularly as China removes tariffs that once protected farmers from imports. In some counties of Liaoning province, where imports of foreign grains are depressing prices for farmers, incomes have fallen more than 5 percent.

In crucial ways, Sanbaihu, a village of 3,000 in Gansu province - one of China's poorest - has seen progress. As communism gives way to free-market reforms, villagers have been able to raise cash by selling produce. Man-made caves carved into the hills, now abandoned, remain as reminders of a time when people had no other shelter. Today, most live in mud and brick homes - with satellite dishes.

``People's lives are improved a little,'' said the village's party secretary, Yan Jiying, as he sipped orange soda at home beneath a beaming portrait of Chairman Mao that looked down on a karaoke set and video-disc player. ``Before, we couldn't feed ourselves. Now, we have food to eat.''

China's linkage to the world economy has brought one direct benefit to Sanbaihu: increasingly, it exports watermelon seeds, the principal crop. Demand for the seeds in Taiwan and Hong Kong has sent the price of the crop soaring by 75 percent since 2000. Still, the farmers are angry, asserting they are being cheated out of an even higher market price by middlemen. The traders have trucks, something the farmers lack.

Living hand to mouth, farmers cannot afford to stockpile and wait for a higher price.

``We have no bargaining power,'' Wang said. ``It's not fair.''

What gains they have seen are erased by increased prices for everything. Fertilizer prices have doubled as coastal farmers expand operations to cash in on demand from Japan and Korea - an option closed to farmers in Sanbaihu, who live more than 1,600 kilometers from the nearest port.

Wang's family cannot afford to eat meat, buying it only once a year. Throughout China, food prices increased 28 percent between 2000 and 2004.

Wang's shoes are full of holes. He owns a single pair of pants. He bought them two years ago in the county seat, Jingyuan, for about US$3.50. That was twice as much as the pants they replaced, which he purchased in 2001.

Throughout China, more than 200 million farmers have supplemented incomes by becoming migrant laborers. Typically, one or two people go, sending money back.

Roughly 360 Sanbaihu residents have become migrant labourers in Gansu, where wages are low. Transport to Guangdong, where there is higher-paying factory work, costs about US$35. Two of Wang's children work outside Sanbaihu - his son, 22, as a security guard in a village and his daughter, 20, in Jingyuan as a waitress.

Neither makes more than US$25 a month, leaving them nothing to send home. They could make twice or three times that if they went to the coast, but their father will not allow it. He cannot understand the newscasts he watches at his neighbor's house because he does not understand Putonghua. He cannot read a newspaper because he is illiterate. He has heard stories about exploitative factory owners in Guangdong.

``I fear they'd be put in danger or cheated, because they have never seen the world,'' Wang said. ``I would worry that they would never return.''

All of Wang's hopes rest on his youngest son, now in Jingyuan in high school. He is the first in his family to attain that level of education. The costs of keeping him in school are monumental, about US$250 per year.

But Wang still hopes his son will pass university entrance exams, get a white-collar job and lift his family out of the poverty that still defines reality in most of rural China.