Ministry to target high salaries
By Feng Jianmin |
December 21, 2012, Friday
|
Print Edition
Print Edition
CHINA is to step up controls on salary levels at monopoly industries in the country's fight against a wealth gap that has been described as "alarming."
Improving income distribution will be a priority of the nation's fiscal targets next year, the Ministry of Finance said in a statement yesterday. Measures will include tighter controls on salaries in monopoly industries - mainly state-owned companies - and those of high income individuals, regulating subsidies granted to civil servants, and relieving low-income individuals of the pressure of education, medical and housing costs.
"We will deepen tax reforms, adjust income distribution ... and improve people's livelihoods," Finance Minister Xie Xuren said.
The ministry also prioritized tax cuts, lifting household consumption, accelerating urbanization with preferential fiscal policies, improving medical care and other social welfares.
Unfair income distribution has been a major source of public complaints over recent years, with many targeting state-run sectors. Economists view the issue as a major obstacle in deepening the country's economic reform.
A State Council meeting in October said the government would formulate a general income distribution reform scheme in the fourth quarter of the year.
Yesterday's statement echoed the pledge of Xi Jinping, the new leader of China's Communist Party, to improve social equality as the country faces problems such as the widening wealth gap, the cost and accessibility of medical services and pollution.
And it comes after media reports that some executives in state-owned enterprises had objected to an income distribution plan submitted by China's top economic planner, the National Development and Reform Commission.
The plan, originally due by the end of the year, was delayed because of heated internal debate on how to regulate the income of executives in state-owned companies and how much dividends should be handed in from state-owned assets, a government official told reporters last week.
China has been studying income distribution reform for eight years, and the wait for reforms has partly led to a domestic wealth gap 50 percent above an "alarming" level that could cause social unrest, a report released last week showed.
The Gini coefficient was 0.61 in China in 2010, based on a survey of 8,438 households by a research center under the central bank. The Gini index ranges from 0, which represents perfect equality, to 1, which implies perfect inequality. Readings above 0.4 are used by analysts as a gauge of the potential for social disturbance.
The inequality reflected in the Gini reading may exacerbate concern that the benefits of economic growth over the past decade have been going mainly to the rich.
Gan Li, a chief researcher, said the gap between the rich and the poor was wide between the regions and rural and urban areas. He suggested the government take 3.8 trillion yuan from fiscal revenue and state-owned enterprise profits to narrow the gap.
Improving income distribution will be a priority of the nation's fiscal targets next year, the Ministry of Finance said in a statement yesterday. Measures will include tighter controls on salaries in monopoly industries - mainly state-owned companies - and those of high income individuals, regulating subsidies granted to civil servants, and relieving low-income individuals of the pressure of education, medical and housing costs.
"We will deepen tax reforms, adjust income distribution ... and improve people's livelihoods," Finance Minister Xie Xuren said.
The ministry also prioritized tax cuts, lifting household consumption, accelerating urbanization with preferential fiscal policies, improving medical care and other social welfares.
Unfair income distribution has been a major source of public complaints over recent years, with many targeting state-run sectors. Economists view the issue as a major obstacle in deepening the country's economic reform.
A State Council meeting in October said the government would formulate a general income distribution reform scheme in the fourth quarter of the year.
Yesterday's statement echoed the pledge of Xi Jinping, the new leader of China's Communist Party, to improve social equality as the country faces problems such as the widening wealth gap, the cost and accessibility of medical services and pollution.
And it comes after media reports that some executives in state-owned enterprises had objected to an income distribution plan submitted by China's top economic planner, the National Development and Reform Commission.
The plan, originally due by the end of the year, was delayed because of heated internal debate on how to regulate the income of executives in state-owned companies and how much dividends should be handed in from state-owned assets, a government official told reporters last week.
China has been studying income distribution reform for eight years, and the wait for reforms has partly led to a domestic wealth gap 50 percent above an "alarming" level that could cause social unrest, a report released last week showed.
The Gini coefficient was 0.61 in China in 2010, based on a survey of 8,438 households by a research center under the central bank. The Gini index ranges from 0, which represents perfect equality, to 1, which implies perfect inequality. Readings above 0.4 are used by analysts as a gauge of the potential for social disturbance.
The inequality reflected in the Gini reading may exacerbate concern that the benefits of economic growth over the past decade have been going mainly to the rich.
Gan Li, a chief researcher, said the gap between the rich and the poor was wide between the regions and rural and urban areas. He suggested the government take 3.8 trillion yuan from fiscal revenue and state-owned enterprise profits to narrow the gap.
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