"Regulating grey income" sparks debate in China (2)

09:14, March 11, 2010      

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The fair distribution of social wealth, at the center of heated discussions by deputies, has become one of the issues on the government's top agenda as the country is faced with a widening gap between rich and poor.

Deputy Dai Zhongchuan, vice head of the school of law at the Fujian-based Huaqiao University, read the term in the same light.

"The aim of regulating grey incomes is to wipe off the grey area by drawing a clear-cut line between the legal and illegal portion," he said.

Dai continued to say that "grey" gains take a relatively large share of the income paid in some sectors, resulting in an unfair distribution of social wealth.

Cai deemed energy monopolies a hotbed of grey income, as state-owned enterprises in the fields of electricity, oil, natural gas and other resources, subject to no market competition, reaped lucrative profits and paid handsome remunerations to their employees.

Employees in energy monopolies earned 10 times more than their counterparts working in non-monopoly sectors, according to Liu Minghua, a member to the National Committee of the Chinese People's Political Consultative Conference on Monday.

Cai said outlawing the illicit portion in "grey incomes" and taxing the legal portion is conducive to narrowing the income gap.

In this sense, regulating "grey incomes" refers to bringing competition to those sectors that need not be monopolized and the income and dividend levels in those monopolies should be tightly monitored, Cai said.

Cai called for a larger share of profits of energy monopolies to be handed in to the national coffer.

He also expected legal boundaries to be set up in the future to identify which part of grey incomes are legal or illegal.

Relevant research aimed at regulating "grey incomes" is already underway, according to deputies in charge of income administration from the Ministry of Human Resources and Social Security.

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