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People's Daily Online>>China Business

Making homes affordable (2)

By Wu Yixue (China Daily)

13:47, April 15, 2012

China has witnessed a sustainable rise in people's incomes over the past decades, but its labor remuneration is still low in national economic aggregates. For example, Beijing's per capita GDP reached $12,477 in 2011, an equivalent to that of wealthy nations, but its per capita disposable income was only 32,900 yuan, 40 percent of its per capita GDP.

According to a recent survey published by the United Nations International Labor Organization, China's per capita monthly income is $656, less than the world's average of $1,480. It ranked 57th among the 72 surveyed nations. Although there are some who doubt about the accuracy of the survey there is a wide consensus that labor remuneration is low in China. Statistics from the National Bureau of Statistics show that China's per capita disposable income for urban residents was just 2,000 yuan a month in 2011.

A substantial increase in people's incomes will not only help the country realize its consumption-tilted transformation, it will also help ease the pressure on the government to promote a decline in house prices to attain a reasonable price-to-income ratio. At a forum held in Guangdong province in late March, Qi Ji, vice-minister of housing and urban-rural development, also said some cities should resolve the issue of high home prices through raising residents' incomes.

Tax reduction serves as an effective way of boosting people's purchasing power and the government has enough resources to reduce people's tax burdens. Statistics show that the country's fiscal revenues reached 10 trillion yuan in 2011, an increase of 24.8 percent year-on-year. In the first two months of this year, the fiscal revenues also surpassed 2.09 trillion yuan, a rise of 13.1 percent.

Reducing people's tax burdens would help the government achieve its target of promoting a reasonable ratio of home prices to household incomes.

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