Income distribution reform, a doomed petition?

The once-in-a-decade leadership change in China has made the whole world wonder what the new leaders would do to further prosper China. While, for Chinese people themselves, the question is what they really want the new cabinet to do to prosper their lives.

If an online survey made by state-owned newspaper China Youth Daily could be counted as some solid source, then the answer to the aforementioned question would be income distribution reform. 

Among all the 11,405 internet users surveyed online, 66.6% of them indicated that they hope the new leaders could launch income distribution reform. And because it’s a multiple-choice survey, anti-corruption campaign came second by being chosen by 57.8%.

When being asked which elements could especially hinder China’s development in the next decade, over 75% ticked extreme disparity between the rich and the poor.

China Youth Daily also referred to the fact that, over half of the surveyed group is post 80’s youth, and most of them earn less than 5, 000 yuan (or $800) per month.

Although the surveyed group may be not perfectly representative samples, the huge disparity does exist in China.

In 2011, the University of Texas A&M in the US did a special research about it. After interviewing over 8,000 Chinese families, they made a conclusion that the 10% top rich in China actually controls 56% of the total social wealth, and the fact indicates China is no better than some notorious African countries as far as social equality is concerned.

And, according to People’s Daily online, the 10% most wealthy people in China earns 23 times more than the most poorly-paid 10%. The serious polarization may even affect social stability. So, in the present stage the government is endeavoring to move the shape of social stratum structure from "PYRAMID" to "SLIVER" by upgrading the bottom class, expanding the middle class and limiting the upper class. Now, at the 18th CPC National Congress, the government has promised to map out concrete plans for income distribution reform after mulling over it for eight years.

Being a common concern, it’s not difficult to find out interesting posts about the problem on weibo, China’s twitter.  

@Half god: The income distribution reform three decades ago, phased out absolute equalitarianism, and thus highly stimulated production and creation. This time, if the reform is only generally aimed at advocating equality and narrowing gap, it would lack incentive. We need some more concrete scheme for the reform to be implemented. 

@Promise: To finally realize equal distribution, measures like raising the minimum wage standards, or adjusting the threshold of personal income tax would only relieve the symptoms but not cure the causing ‘disease’, which is monopoly management and collusion between the government and big businesses.    

@Er Liran: I think the government has been taking a little too much from the common people, by varied taxes, I mean. And for those big state-owned companies in monopolized industries, they should also do something to regulate their privileges and excess wage. Let every individual in the society live on their own efforts and talents.

@Xierang Duojie: We could not cut down tax for the bottom class and then impose more on the middle class. By only regulating tax rate, the 10% upper class would not be even slightly affected. And the middle class of the country is literally shouldering the heaviest pressures. If the middle part of Chinese people could not get strong, then common prosperity is just an empty rhetoric.

@success: We should firstly cut down the pay to the management, and then raise the pay for common workers. In this case, people from different social stratum get to enjoy the fruits of development and reform.

@cold curry: The key for the reform is to raise labor income and at the same time, decrease capital revenue. First, the country needs to transform its economy from investment-driven to consumption-driven.

@China economy: The breakup of monopolies creates competition, which leads to better quality and lower prices for the public.

@people’s daily online: It has taken the government eight long years to formulate the concrete scheme of income distribution reform. But the point is the main object of the reform--the middle class is not as potent as they are called-- in China, they could barely afford themselves a middle class life in real sense. 

@insomnia: If we could not prosper in reform, we will perish in delay. We have waited eight years for the reform to come. All of these allude to one fact that the privileged class with vested interests would not easily give up the rights entitled to them already. While, in the context of extreme social disparity, we known, the reform is a must. 

@Yu Wenbo: Why do all major reforms be put on next year’s agenda? China’s healthy development demands new leaders’ solid action but not talking and waiting.

@mutual concern: The new CPC meeting promised citizens a doubled income in ten years, and that vow surely aroused heated reaction. In the past decade, China maintained an average growth rate of 7.2%; if we keep going with the momentum in the next decade, then the goal is to be attained. The problem is the high target may impose too heavy a burden on China's already distraughted economic transformation. For example, if all the individuals got doubly paid, then how could the private business profit and survive?

@ Moench-BVB-Emma: The income distribution reform is just a fairy tale. Believe it or not, in ten years, the polarization would go sharper.

@find yourself: What common people really despise are not those who made success through labor or wisdom, but those privileged parasites who feed on them. So, let’s forget about reforming income distribution and devote all of our energy into anti-corruption campaigns. 

@ ljh55: This is a doomed petition, with ambitious but weak central government aiming to cancel the unreported “gray income” of civil servants, and frustrate overpaid management from monopolized industries. 

@one-sam: There is a joke. A peasant had a donkey, and in order to make it pull the grind, the clever man hung a cabbage in front of it. So, always chasing after the delicious food in front, the donkey kept pulling until it died exhausted. Now, the cabbage had a new name--income distribution reform.  


 


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