CPC expected to bridge wealth gap by fair distribution

17 january 2013

BEIJING – Zhang Lan, 43-year-old primary school teacher in southwest China’s Sichuan province, has seen her monthly salary quadruple over the past decade to 4,000 yuan, but she still has to pinch pennies.

“My monthly income still falls short of the price of one square meter of an apartment,” says Zhang.

The urban dweller complains that with more than 20 years of work experience, her income still lags far behind those in the country’s monopolized industries and sectors.

But public discontent over income distribution is not confined to cities.

Latest statistics from the National Bureau of Statistics showed country’s rural per capita cash income in the first three quarters this year was 6,778 yuan ($1,084), which was only 36.8 percent of the per capita disposable income of urban residents in the same period.

Analysts warn that China’s yawning wealth gap has triggered not only rural resentment over the wealthy urban dwellers, but also is brewing discontent within cities as well as villages.

Although the Chinese economy has grown into the world’s second largest, the original goal of China’s economic reform to achieve common prosperity remains a distant future, they warn.

“Poverty and backwardness brew social turmoils. The remedy is to put development first to secure economic prosperity, sufficient employment and the smooth flow of wealth,” says Ji Zhengju, researcher with the Central Compilation and Translation Bureau (CCTB) of the Communist Party of China (CPC) Central Committee.

The State Council, China’s Cabinet, has decided to establish an overall income distribution plan by the end of this year, and observers have put high hope on the upcoming National Congress of the CPC which is scheduled to open on November 8.

Zhao Chenggen, professor with the School of Government of Peking University, expects China’s new leadership to elaborate on how to boost economy and how to make sure economic fruits shared by all Chinese in a more equitable way.

President Hu’s message

At a high-profile meeting held in July, which is widely considered of sending a key message for the upcoming five-year CPC congress, Chinese President Hu Jintao has urged efforts to deliver more benefits to the people, relieving people’s worries and addressing their practical concerns.

Progress should be made in education, employment, health care, retirement and housing in order to allocate more to people in a fairer way, Hu made the remarks while addressing the opening session of a workshop for ministerial officials and provincial heads in July.

It shows that the CPC is determined to make a “bigger cake” and distribute it to the people more reasonably, a move which matters to the country’s future development, says Zhao.

Ji Zhengju maintains that it is a harder task for the CPC to ensure fairness in a country whose economy and society are experiencing complex and profound changes amid rapid economic growth.

Yawning wealth gap

In urban regions, uneven income distribution and excessive wealth gaps among groups have become a severe problem affecting people’s happiness.

Unfair income distribution has been seen by observers as a major obstacle in deepening the country’s economic reform and growth mode transformation.

In 2011, the maximum income gap between senior company executives and migrant workers was 4,553 times, according to a report conducted by the Ministry of Human Resources and Social Security.

The income growth rate of executives has also vastly exceeded that of the common staff. The income gap apparently increases and causes unfair social income distribution, says the report.

A forthcoming income distribution scheme should be able to regulate inappropriately high earnings in monopolized sectors in a bid to address income disparities, say experts.

China has been working on income distribution reform since 2004, but the people’s expectations have not been met. The state-run monopolized sectors have become a major target of public complaints, says Ji.

Aside from improving incomes, capping high wages in state-run sectors will become a focus in the reforms, he says, acknowledging that a slight move in income distribution may affect the whole situation, especially when vested interests are involved.

Reform should take initial steps on the primary distribution phase by putting monopoly law into practice, improving property ownership and bridging the “identity gaps” among rural and urban sectors, according to Ji.

Xie Chuntao, a professor with the Party School of the CPC Central Committee, says that the principle of by the people, on the people and for the people has been the linchpin for the Chinese governing party to secure social stability over the past decades.

“If the Party continues to adhere to such a principle, the Chinese will no doubt trust and support the government,” Xie says.