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Big Income Gaps Found in China, Much Concerned by State
"When the river rises the boat floats high", these are words people often use to describe the happy course of life they have traversed and a new life they have come to enjoy in China.
Following a speedy development of economy people's income has gone up steadily in China. Life has already been much better off for an increased number of people and has even become affluent, rich and colorful not merely for a few. Meanwhile, there is a greatly decreased number of families found in dire straits or economically hard pressed on the Chinese land. Still, however, a deplorable thing much concerned by government authorities in recent years is that big gaps have appeared in people's income in town and country in China.
An investigation has recently been conducted by the State Statistics Bureau Urban Social Economy Investigation Group into the income of 40,000 households in town and country in China. Statistics show that a per-capita income of 5,854 yuan had been achieved by people in 1999 to show a 7.9% increase over 1998, or a 9.3% actual growth rate over that of the country's GDP, when the price factor was deducted. But this does not exclude the fact following a steady growth of income by people in town and country there has been noted a widening gap in people's income and enlarged disparities between rich and poor. Of the 1.25 billion Chinese people with investigations conducted, a 20% with a high income have got a wealth of as much high as 42.4% of the national.
A fact to be noted is that people began to have income differences ten years ago in China. A rough estimation was that 10% of people already owned 40% of banking savings in China and in the place of these was a 20% who had taken 80% bank savings of the country's during the mid-90s. Last year, a sample survey showed a population of less than 5% as the richest stratum who had become owners taking nearly half of China's over six trillion yuan of bank deposits.
Chinese scholars point out that China has by its history shown that "the biggest worry lies not in poverty but with unequal social distribution" when speaking about the country's long-standing stability and development. Though things may not be entirely so, they should be correctly understood in the way no widening gaps should go unchecked and when social stability is sought it should be regarded as a thing in accord with the demand of the people.
As things stand in China today there are many causes speaking of widening gaps in people's income. Take for example geological difference and economies developed at a different level. It is for these that people in China's eastern areas have for long obtained a higher income than those in the country's west and central areas, not to say those of urban people with a higher income than those living in rural areas. Differences of trades and institutional reasons can in no way be excluded without doubt from the various causes found. These include a monopolistic trade enjoying a much far greater income than that by people working in a non-monopolistic profession and a greater income by people employed in a new emerging trade than those going in for a conventional or traditional occupation or production line. Typical was a senior high school graduate working in an insurance company with a yearly income of 8,059 yuan while a college graduate working in an industrial enterprise was given merely a yearly total of 7,329 yuan in 1995. Against these are big gaps that have been seen in the income of people working in different industrial enterprises in recent two years. As are shown by statistics in 1999, a 48.6% and 435% growth of pay had been achieved by employees going in for real estates, finance and insurance when compared with 1990. Sci-tech research, real estates, finance and insurance were listed as three trades given people the highest pay. In addition, there are policy causes resulting in a widening of differences in people's income. Take for example some special preferential policies introduced by the state in eastern coastal areas. For a speedy development of economy a speedy growth was also seen in people's income. This does not deny the fact there are still a few outlaws who have amassed wealth and got themselves rich through tax evasion and a sundry of lawless acts as illicit trade, profiteering and smuggling.
As have been said above, the various causes have aroused great concern of government authorities in China and many countermeasures have come to be adopted. Take for example launching of the strategy for development of the country's west areas, as a great measure toward the end of narrowing the gaps of regional differences in China. This year, there are "10 major projects" that have been launched in the country's west areas. These are construction undertakings involving an investment of some hundred million yuan to a few dozen billion yuan and with these immediate effect will be found in helping develop production, create more job opportunities and raise people's income in those areas in China.
Meanwhile, unremitting efforts are also being by government authorities in doing a job in eliminating poverty and helping the poor for a narrowing down of differences in people's income. Statistics show that up to 1955 a total of 137.8 billion yuan had been used for poverty-relief work in China and the money had even been up to 24.8 billion yuan to that end in 1999 alone, showing a 30-fold increase over the 1980s. To become unemployed, laid off, retired at an early age and living at an old age and helpless are among the main factors that have placed people economically in dire straits in town and country in China. Great attention has already been paid to the setting up of an operational social guarantee system in China. Last year there were altogether over 2.81 million of rural and urban people who have been given basic living guarantee funds to a total of as many as 1.969 billion yuan in 667 Chinese cities and 1,638 counties.
Efforts have already been made by the Chinese Government to make most of its policy to narrow down people's differences in social income. Take for example redistribution to be effected through taxation. It is told that the concerned departments are considering new tax policies to be introduced for those with a low and medium-level income and those with a high income. To be specific, increased taxes will be collected on those with a high income. As for those with a low income, subsidies will be issued to guarantee their basic demands for living. The existing tax varieties include income tax, interest tax and legacy tax, in addition to gift tax still being considered. Revenues from these tax varieties will be used in a way to back up construction activities in underdeveloped areas and help poor households. A growing amount of income tax has already been collected by the state over the years and these had been up to a total of over 30 billion yuan in 1998. But experts say there is still an estimated tax amount of over 60 billion yuan that have been evaded, hence a much large room for improved tax policies to be put out in China.
There should be no place for past egalitarian distribution in today's China. But it is by no means a good thing for big increased gaps to be found in the country as have been seen in the past or so years. For a country as China developing at the primary stage of socialism, no increased social gaps in people's income should in no way go unchecked but develop on the basis of common prosperity.
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