It has been officially acknowledged that the income gap is a bit
too big in the country's urban areas.
The National Development and Reform Commission (NDRC) on Sunday issued a document
that says the income disparity, to a considerably large extent,
results from irrational distribution of social wealth.
The conclusion is based on a national survey of 5,900 families
in 20 cities and data provided by the National Statistical
Bureau.
Statistics indicate that one-fifth of the urban population with
the lowest income owns only 2.75 percent of the total income by
urban residents. Their total income makes up only 4.6 percent of
the earnings by the population's one-fifth richest residents.
To illustrate the irrational distribution, the document mentions
two perspectives. First, income disparity between different
industries has enlarged dramatically in recent years, as some of
them made bigger profits using their monopoly status. Second, the
income gap between the managerial staff and ordinary staff workers
has also been widening.
In these two cases, some policies adopted during the reform
process were to blame because these policies allowed state-owned
sectors that use their monopoly status to make big profits
distribute a large share of the profit among their workers.
It was also unfair to allow the managerial level staff to have
much higher salary than ordinary staff workers within some
state-owned enterprises and institutions.
In addition, some urban workers get extra income by doing
business beyond their regular jobs using the power or social
connections they have established in their professions, which
usually involve rare resources. This easily leads to corruption and
unfair competition.
Whatever the reasons, the big income disparity will exert
negative impact on the country's economic and social
development.
It is fairly understandable that those low-income residents
harbour some grievances against their high-income counterparts.
They may even develop a grudge against the government and our
social system.
There is a probability that they may have been denied the right
to share the economic fruit of the reforms. As a result, the
ever-widening income gap has the potential danger of tapping into
social unrest.
The central government, with the goal of building a harmonious
society, is trying to increase common prosperity for all
citizens.
At the very beginning of the reforms in late 1970s, chief reform
architect Deng Xiaoping did propose that some citizens could become
rich first before other people.
But those who have already made fortune should be blazing the
trail for common prosperity.
So the ever-widening income gap either among urban residents or
between urban and rural residents is contrary to the fundamental
principle of the country's development strategy.
The NDRC document says that the government will take concrete
measures to control the ever-widening income gap and make efforts
to adjust the income distribution structure so it can become more
fair and rational.
Such leverages as income tax, heritage tax and other types of
taxes may be employed to tax those high-income residents.
The income from these taxes can be used to strengthen and
optimize the social security system, from which those low-income
residents can benefit.
The government should also create more opportunities for
low-income or unemployed residents to receive training so they may
have the opportunity to get better jobs.
Policies should also be in place to encourage those high-income
residents to donate to charity or public welfare.
The negative impact of the widening income gap among urban
residents will be hopefully relieved, as long as the government
participates fully in adjusting the distribution mechanism.
(China Daily February 8, 2006)