II-2 Question: In recent years, the mounting dissatisfaction toward the widening wealth gap has led many to question the current reforms in China. It is said that the Chinese Government is conducting reform of the income distribution system in order to solve the problem. What are the contents of this reform and who will benefit from it?

A: Over 20 years ago, China implemented an egalitarian approach in distribution. However, the reform and opening up policies have brought both pros and cons on income distribution. While rapid economic growth spurs the rise of income for urban and rural residents, some problems have surfaced: people in some industries have higher pay; and income gaps keep widening between urban and rural residents, between people living in different regions and between workers in different industries. The unfairness in income distribution and growing wealth divide have become a major hindrance to China's reforms and economic development.

Therefore, reforming the income distribution system to ease the widening of wealth gaps has become a priority for the Chinese Government. In July 2006, the Chinese Government decided to begin reforms on pay and distribution based on harmonizing interest relations. The reform includes the following:

First, reforming the pay system for civil servants. With a focus on improving and standardizing relevant mechanisms, the reform is aimed at forming a new pay and compensation system for civil servants and a framework of a sound distribution mechanism, thus creating conditions for ensuing reforms.

Second, reforming and improving the pay system for employees of public institutions. Employees of public institutions had pay raises and pensions of retirees were adjusted to a more reasonable level.

Third, appropriately raising the stipend standards for disabled service members and family members of revolutionary martyrs and the pension standards for retirees from enterprises.

Fourth, raising the pension standards for retired service members and the compensations for personnel working in departments for affairs related to retired service members.

Fifth, raising the standards of subsistence allowance for city dwellers and increasing the allowance coverage.

According to government statistics, this round of income distribution system reform will benefit 120 million people, including 50 million retirees, 30 million employees of public institutions, 30 million city dwellers who live on subsistence allowances and those who enjoy stipend, and over 6 million civil servants.

Establishing a scientific income distribution system is a long-term project, which will take a lot of effort. However, as long as social equality is underlined amid the nation's rapid economic development and accumulation of social wealth, the problem of widening wealth gaps in China can be solved.

(China.org.cn)