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Income gap soars
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THE Chinese Government is mulling measures to narrow the increasingly expanding income gap between the rich and the poor as the country's Gini index has reached a dangerous level.
A survey conducted by the State Statistical Bureau shows that high-income residents, who make up 20 per cent of the total, own 42.5 per cent of the county's total wealth.
China's top lawmakers and advisors have urged the government to establish a more rational wealth distribution system to prevent an income “polarization" for different people. They warned that if the problem of the income gap is not resolved, social stability and, in particular, economic development will be affected.
According to investigations, currently, the Gini Coefficient, an international index used to measure income distribution, in China stands at 0.458, greater than the international warning line of 0.4, meaning that the Chinese society has entered “a zone of income distribution inequity".
“Egalitarianism and increasing income gap are both wealth distribution inequities," said Xiao Zhuoji, a well-known economist, who said the existence of income gap among social members is normal. Any readjustment of the wealth distribution system should aim at either resolving the problem of unfair distribution or abolishing egalitarianism.
At present, the main problem is the practice of egalitarianism within the existing economic framework. A balance between fairness and efficiency can only be reached through resolving these two problems, he noted.
In his report on the outline of the new five-year plan (2001-2005), Premier Zhu Rongji listed “slow growth in the income of rural people and part of urban residents" as one of the main problems existing in the present economic and social life in the country.
The government does not want to shun the issue. In the outline of the new five-year plan, the issues of increasing individuals' income, rationally readjusting wealth distribution, and improving the social security system are put on top agenda. The government plans to deal with the issue by taking a series of measures including standardizing social distribution order; strengthening supervision and administration over distribution in industries of a monopoly nature; reinforcing the function of taxation to readjust distribution among different groups of people; improving Law on Income Tax; introducing the inheritance tax; protecting legal income; checking on unreasonable income; readjusting exorbitantly high pay; and outlawing illegal gains.
In spite of the enlarging income gap, no one would like to return to the old days when all employees, regardless of their performance at their jobs, were paid more or less the same amount of money, it is reported.(SD-Xinhua)
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