Income Distribution Reform on the Way

Necessity for Income Distribution Reform

"China's income distribution has bordered on the edge of unfairness," said He Keng, Deputy Chairman of the National People's Congress Financial and Economic Committee.

A recent World Bank report noted that China's Gini coefficient, a main gauge of income disparity, exceeded the "security line" of 0.4, indicating unequal income distribution could cause social unrest. Moreover, the latest status report issued by the Ministry of Human Resources and Social Security indicated that the average income of senior administrators at state-owned enterprises was 100 times the average income amount.

The most urgent problems in the reform are to limit excessively high incomes and raise low incomes, He said.

He also attributed the unequal allocation to two factors.

"At first, in the long term we paid more attention to efficiency rather than fairness," he said. "Second, because China's economy is not so developed, leaders at all levels have put too much value on economic development in a one-sided pursuit of gross domestic product."