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People's wealth flows into a few hands
By Chen Yongrong and Liu Jie |
March 18, 2010, Thursday
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Print Edition
Print Edition
AS China's widening income gap threatens social stability and hampers consumer spending, the government is moving to reform the revenue distribution system.
According to a recent World Bank report, the Gini Coefficient for China, a gauge of income disparity, surged to 0.47 in 2009 as the country expanded to the third biggest economy in the word, exceeding the "security line" of 0.4 - indicating that unequal income distribution could arouse social unrest. The figure was 0.21 to 0.27 three decades ago.
Despite clear government gestures of increasing people's incomes, it is difficult to address the problem.
In China, complaints are growing that average income growth lags behind the rise of state fiscal revenue and living costs, while wealth quickly collects in the hands of a small group of people.
A secretary working in a small business earns less than 40,000 yuan (US$860) a year, while the same work in a company of a monopoly industry receives three times of that.
"It is an unfair income distribution system that widens the income gap," said Yi Xianrong, a researcher at the Chinese Academy of Social Sciences.
Zhou Tianyong, a professor with the Party School of the Communist Party of China Central Committee, said income of government and business enterprises should be restricted within 25 percent of national income.
"There are obstacles on the way to fair distribution and social justice, and it takes courage and wisdom to carry out the reforms," said Ding Xilin, chief editor of news magazine Xinmin Weekly.
Premier Wen Jiabao promised early this month that the government would promptly formulate policies and measures to adjust the distribution of national income, and gradually let individual income rise faster than that for government and enterprise employees.
He also stressed the role of fiscal and taxation policies in adjusting the primary and secondary distribution, which would "create conditions for more people to earn property income such as securities gains."
To lawmakers and political advisers who gathered at the annual sessions of the National People's Congress (NPC) and the National Committee of the Chinese People's Political Consultative Conference early this month, more jobs and a stronger social safety net are the top priorities.
"More job opportunities could bring up salaries," said Zhang Quanshou, an NPC deputy and president of a human resources development company in south China. "When job applicants outnumber vacant positions, you never expect a hefty wage."
Improvements in social security also benefit mid- and low-income families, said Zhao Xiangping, an official with the Department of Human Resources and Social Security in China's central Hunan Province.
Premier Wen pledged the government will spend 318.5 billion yuan to expand the social security system and raise the level of basic pensions of enterprise retirees by 10 percent, which helps provide security for mid-and-low income families after retirement.
A sound taxation system is also important for narrowing the income gap. Many lawmakers and political advisers have called for taxation reforms, including lifting the minimum taxable personal income threshold, and imposition of property and estate taxes.
Wen said the government will deepen the reform of the income distribution system of monopoly industries, and set strict standards for the incomes of executives, especially senior ones, of state-owned enterprises and financial institutions.
Ultra-high incomes at monopoly industries, such as telecommunications, energy and power generation, which widen the income gap and worsen social equality, have long been a source of public complaints.
Zhang Xiaoji, a researcher with the Development Research Center of the State Council, a government think-tank, said it is important to level the threshold of the monopoly sectors and allow private business to enter.
Indeed, as Zhang noted, only when different parties share the same chances of competition, income gap between the monopoly sector and other industries can be closed.
(The authors are Xinhua writers.)
According to a recent World Bank report, the Gini Coefficient for China, a gauge of income disparity, surged to 0.47 in 2009 as the country expanded to the third biggest economy in the word, exceeding the "security line" of 0.4 - indicating that unequal income distribution could arouse social unrest. The figure was 0.21 to 0.27 three decades ago.
Despite clear government gestures of increasing people's incomes, it is difficult to address the problem.
In China, complaints are growing that average income growth lags behind the rise of state fiscal revenue and living costs, while wealth quickly collects in the hands of a small group of people.
A secretary working in a small business earns less than 40,000 yuan (US$860) a year, while the same work in a company of a monopoly industry receives three times of that.
"It is an unfair income distribution system that widens the income gap," said Yi Xianrong, a researcher at the Chinese Academy of Social Sciences.
Zhou Tianyong, a professor with the Party School of the Communist Party of China Central Committee, said income of government and business enterprises should be restricted within 25 percent of national income.
"There are obstacles on the way to fair distribution and social justice, and it takes courage and wisdom to carry out the reforms," said Ding Xilin, chief editor of news magazine Xinmin Weekly.
Premier Wen Jiabao promised early this month that the government would promptly formulate policies and measures to adjust the distribution of national income, and gradually let individual income rise faster than that for government and enterprise employees.
He also stressed the role of fiscal and taxation policies in adjusting the primary and secondary distribution, which would "create conditions for more people to earn property income such as securities gains."
To lawmakers and political advisers who gathered at the annual sessions of the National People's Congress (NPC) and the National Committee of the Chinese People's Political Consultative Conference early this month, more jobs and a stronger social safety net are the top priorities.
"More job opportunities could bring up salaries," said Zhang Quanshou, an NPC deputy and president of a human resources development company in south China. "When job applicants outnumber vacant positions, you never expect a hefty wage."
Improvements in social security also benefit mid- and low-income families, said Zhao Xiangping, an official with the Department of Human Resources and Social Security in China's central Hunan Province.
Premier Wen pledged the government will spend 318.5 billion yuan to expand the social security system and raise the level of basic pensions of enterprise retirees by 10 percent, which helps provide security for mid-and-low income families after retirement.
A sound taxation system is also important for narrowing the income gap. Many lawmakers and political advisers have called for taxation reforms, including lifting the minimum taxable personal income threshold, and imposition of property and estate taxes.
Wen said the government will deepen the reform of the income distribution system of monopoly industries, and set strict standards for the incomes of executives, especially senior ones, of state-owned enterprises and financial institutions.
Ultra-high incomes at monopoly industries, such as telecommunications, energy and power generation, which widen the income gap and worsen social equality, have long been a source of public complaints.
Zhang Xiaoji, a researcher with the Development Research Center of the State Council, a government think-tank, said it is important to level the threshold of the monopoly sectors and allow private business to enter.
Indeed, as Zhang noted, only when different parties share the same chances of competition, income gap between the monopoly sector and other industries can be closed.
(The authors are Xinhua writers.)
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