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China's Income Disparity Grows
According to a survey by the State Statistics Bureau, less than five percent of China's wealthiest hold nearly a half of the country's savings deposits worth more than 6 trillion yuan.
China's national income has risen along with its swift economic growth. The number of Chinese who enjoy a fairly well-off and even wealthy lifestyle has increased and the number of Chinese who remain in poverty has dwindled. However, in recent years a new phenomenon has risen - the income gap between rural and urban Chinese has grown wider and wider.
According to the National Bureau of Statistics Urban Social Economic Survey of nearly 40,000 families nationwide, the average income per person in 1999 was 5,854 yuan, up 7.9% from the year before. After adjusting for inflation, the actual growth was 9.3%, which is higher than the increase in China's growth national product. But as the national income has increased, the income disparity between rich and poor has also grown; the contrast between rich and poor grows starker daily. Of the 1.25 billion people polled in this survey, the top 20% in terms of highest income held 42.4% of the total wealth.
In truth, the gap between China's rich and poor first began to appear ten years ago. At the time, rough estimates said that the top 10% held 40% of the banks' savings. By the mid-1990s, 20% owned 80% of the savings in banks.
The government is extremely concerned over the reasons for the disparity between rich and poor and has adopted numerous policies to address the problem. For example, the current call to develop China's western region is the biggest move aimed at shrinking the affluence gap. This year, there have been ten major projects started in the West whose investments range from 1 billion to 20 billion yuan to get instant results in terms of local production, employment and income.
According to a survey by the State Statistics Bureau, less than five percent of China's wealthiest hold nearly a half of the country's savings deposits worth more than 6 trillion yuan.
China's national income has risen along with its swift economic growth. The number of Chinese who enjoy a fairly well-off and even wealthy lifestyle has increased and the number of Chinese who remain in poverty has dwindled. However, in recent years a new phenomenon has risen - the income gap between rural and urban Chinese has grown wider and wider.
According to the State Statistics Bureau, Urban Social Economic Survey of nearly 40,000 families nationwide, the average income per person in 1999 was 5,854 yuan, up 7.9% from the year before. After adjusting for inflation, the actual growth was 9.3%, which is higher than the increase in China's growth national product. But as the national income has increased, the income disparity between rich and poor has also grown; the contrast between rich and poor grows starker daily. Of the 1.25 billion people polled in this survey, the top 20% in terms of highest income held 42.4% of the total wealth.
In truth, the gap between China's rich and poor first began to appear ten years ago. At the time, rough estimates said that the top 10% held 40% of the banks' savings. By the mid-1990s, 20% owned 80% of the savings in banks.
The government is extremely concerned over the reasons for the disparity between rich and poor and has adopted numerous policies to address the problem. For example, the current call to develop China's western region is the biggest move aimed at shrinking the affluence gap. This year, there have been ten major projects started in the West whose investments range from 1 billion to 20 billion yuan to get instant results in terms of local production, employment and income.
The Chinese government has spared no efforts to help the poor. According to statistics, up to 1995, the central government spent a total of 137.8 billion yuan to eradicate poverty. In 1999 alone, it spent 24.8 billion yuan to fight poverty, thirty times more than it did in the entire eighties. The mainstream destitute population includes the unemployed, laid-off, early retired and elderly who have no one to care for them. Thus, the government is paying a great deal of attention to the construction of China's social security system. Last year, 2.8 million Chinese in 667 cities and 1630 counties picked up welfare checks, which totaled 2.0 billion yuan.
The Chinese government is relying on its policies to close the income disparity. For example, it is considering taxing the upper, middle and lower classes differently. The upper class would be taxed more while the lower class would receive income, welfare and other basic subsidies. The funds from current individual taxes including income tax, interest tax, inheritance tax and donation tax are being considered to use to support construction in areas lagging behind and help out poor people. The government has collected more and more money in individual tax year after year. In 1998, tax revenues reached approximately 30 billion yuan. Experts estimate that as much as 60 billion yuan in tax revenues are not collected.
Experts have criticized the government's previous policies to distribute everything evenly. But the recent trend in income disparity isn't a good thing either. As a socialist country in its primary phase, China should strive for the goal of having all Chinese grow rich together.
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