China to narrow income gap
February 6, 2013, 4:31 pm

China aims to boost welfare and strengthen the social safety net. [Getty Images]

The State Council, the highest executive administration in China, said in a statement Tuesday that it would also strengthen the social safety net.

“Narrowing the income gap is essential for ensuring social justice and social harmony,” the State Council said in a statement posted on the central government website on Tuesday. “We need to raise income levels of the poor and adjust taxes on the excessively wealthy,” it said.

The State Council’s statement follows up on the achievements of a task force established in October 2010 to study income distribution reforms.

According to recommendations from the National Development and Reform Commission, the Ministry of Finance and the Ministry of Human Resources and Social Security, authorities will launch a program to “boost national incomes, deepen reforms on the income distribution system and enable people to share the country’s development achievements”.

Chinese officials say their goal is to double 2010 gross domestic output and per capita income for both urban and rural residents by 2020.

The government will also focus on enhancing and making more affordable low-income housing; a statement announced that 6.01 million affordable units had been completed with another 5.6 million having undergone renovation.

The State Council hopes to complete construction of a further 25 million low-income housing units by 2015 at a price of $37 billion.

The Central Economic Work Conference, China’s most important economic policy meeting, held last December, determined that China would look inward during 2013 and focus on increasing domestic demand, focusing on the capital market and real estate sectors.

“China will put job creation and people’s livelihood on top of the agenda. It will increase input into rural development, education, services, health, social security, job creation, environmental protection and technological innovation,” a China Central Television (CCTV) report said at the time.

In figures recently released by the National Bureau of Statistics, and carried by Bloomberg News, “rural per-capita net income advanced 10.7 per cent, compared with 9.6 per cent for urban dwellers, partly on the rise in migrant labourers and their wages”.

The figures seem to fall in line with last December’s Conference – government focus on rural areas has seen benefits payments surge by 21.9 per cent there, outpacing similar remuneration in urban areas, and health-care spending there has increased by more than 30 per cent in 2012.

This marks a three-year trend in which rural per-capita income was higher than in urban areas.

Source: Agencies