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Business / Macro

High hopes on CPC for fairer incomes

(Xinhua) Updated: 2013-01-27 21:53

Judging from the handsome salary and three homes enjoyed by Zhang Shun in Beijing, it is obvious that the private firm manager doesn't struggle to save. The middle-age man said that he feels safe to save every penny as he needs to care for his aging parents and support his soon-to-be-married son.

"The lion's share of the country's wealth is taken by a minority of the population. Reform is urgently needed both for the need to guarantee equity and the purpose of boosting domestic consumption," Zhang said.

"The idea of 'getting some people rich first' was raised by late Chinese leader Deng Xiaoping. It's the right path, but lagging political reforms have caused income inequality," according to Huang Zongliang, a Peking University politics professor.

The CPC has kept sober-minded about the issue, but great obstacles are ahead if the new leadership wants to reconstruct the established structure of social interests, Huang said, citing difficulties in reforming state-owned sectors and regulating officials' illegal incomes.

Because of this, the reform is a gigantic project, requiring a whole range of coordinated measures relating to administration, finance and taxation, social security, employment, and the Hukou system, economists maintain.

Meanwhile, the government needs to regulate income distribution through legal and economic means, while boosting the role of the market in the primary distribution of national income, the main source of residential incomes, according to Chang Xiuze, an renowned Chinese economist.

"The government should seek a balance between market competition and fairness, learning to 'dance on the two eggs.' Otherwise it will lead either to social retrogression or upheaval, " Chang said.

China's gross domestic product (GDP) reached 51.93 trillion yuan last year, ensuring the country kept its place as the world's second-largest economy. Consumption contributed 51.8 percent of the GDP growth in 2012, but that measure was still low compared to developed economies due to residents' reluctance to spend.

The government urged the completion of the income distribution reform plan on several occasions last year. The CPC also announced a goal to double China's GDP and residents' per capita income by 2020 from 2010 levels at a national congress in November.

Related stories:

Income gap between the sexes widening

Urban-rural income gap narrowing: ministry

Govt aims to close income gap with wage hike

Index shows wealth gap at alarming level

Wealth gap greatest challenge for China's growth

 

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