How to View Major Problems in China's Income Distribution System

Home>>Business

Last updated at: (Beijing Time) Wednesday, July 10, 2002

How to View Major Problems in China's Income Distribution System

China is now undergoing an all-round adjustment of economic structure, causing profound changes in benefit pattern and in the distribution system.

DISCUSSION

CHINESE

SEND TO FRIEND

China is now undergoing an all-round adjustment of economic structure, causing profound changes in benefit pattern and in the distribution system. To properly view the major problems in current distribution system is of great importance for carrying out President Jiang's thoughts of "three represents" for furthering reform of economic system and structural adjustment as well as ensuring social stability.

Egalitarianism

Egalitarianism, a character of distribution under the planned economy, has seriously blocked the implementation of the principle of distributing according to one's performance, and holds back the development of social productivity. After twenty years' reform the old system has been broken up, but it still remains within state-owned enterprises.

The current egalitarianism is chiefly manifested in a too small an income gap. In state-owned enterprises, technological specialists, administrators and ordinary employees earn almost the same. Income of enterprise runners is bound up with that of workers, no more than two times generally. In administrative departments there is only a small gap in salary for civil servants at different levels. The case is almost the same in institutions.

Income gap

Some people hold that huge income gap is the major problem in current distribution system. This is a lopsided view. We should be against both widening income gap and egalitarianism at the same time.

In a view of reform and development, the widening of income gap is unavoidable. First of all, to shake off common poverty China must allow and encourage part of its people to get rich first so that they will bring about prosperity to all later. Secondly, international practices show that industrialization has to undergo a process of widening income gap.

Many elements attribute to widening income gap, labor and capital being two important factors. Both differences in labor and capital possession lead to wage differences. With the rising income of rural and urban citizens, the scale of currency accumulation gets bigger and bigger. In recent years some citizens began to transfer currency into capital and join the rank of those getting rich first. This is a new trend that deserves enough attention, compared with labor differences, capital possession exerts much greater influence on income differences.

Industrial prosperity is another important element. For people working for different industries, their income-gap is ripped large especially in booming and state-monopolized industries. While workers of those with exhausted resources or falling industries are facing unemployment, or even poverty. For irrational parts in distribution system, the state should adopt various adjusting measures.

Distribution order

Irregular distribution in state-owned enterprises, caused by confused distribution rules, further gives rise to distribution disorders.

The main reason lies in too many and abused capital channels. The benefit the state-monopolized enterprises got through their monopolizing position hasn't been handed in to state finance or transferred to state capital, but into workers' income and welfare subsidies directly or indirectly, widening the income gap between workers of different industries. Administrative departments and institution also transfer capital obtained from other channels into employees' income, enlarging the gap between employees of different working units.

With employees of state-owned enterprises taking up 70 percent of the urban total, the distribution condition of state-owned units casts a great influence on that of the whole. Therefore, to rationalize and standardize income distribution of state-owned enterprises are of great significance.

By PD Online Staff Member Li Heng

Questions?Comments? Click here

Occupation Income Gap Widens in Beijing

China Is Among Countries with Wide Income Gap

The Weathy Evade Taxes? Income Tax Still on Agenda

Iraq Vows to Foil Hostile US Plans ( 3 Messages)

China to Boost the Service Sector to Create More Jobs ( 105 Messages)

Chinese Satellite TV Hijacked by Falun Gong Cult ( 3 Messages)

Shanghai Plans Asia's Biggest Shopping Center ( 64 Messages)

Ways China's Wealth Flows into the US ( 5 Messages)