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Urban income gap requires adjustment
(China Daily) Updated:2006-02-08 10:04

  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 per cent of the total income by urban residents. Their total income makes up only 4.6 per cent 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.




















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