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Reforming income distribution mechanism
2003-10-13
China Daily
China's income distribution system needs to be adjusted to be more fair, efficient and comprehensive,said an article in the Beijing-based magazine Outlook weekly.
China used to see its incomes distributed in an equal-shares-for-all way.
This way of distribution dampened people's enthusiasm for better performance and held back the progress of productive forces.
Since the early 1980s, the system has been under gradual and steady restructuring together with the country's reform and opening-up drive.
A basic framework that features income distribution according to work has now been established.
It was further clarified at the 16th National Congress of the Communist Party of China late last year that such production factors as labour, capital, land, technology and managerial know-how can participate in income distribution according to their respective contribution to production.
Inequalities in distribution, however, remain a thorny problem at the current stage despite past progress, the article said.
In terms of salary income distribution, distribution in State enterprises needs to introduce more market elements. It lacks a market-based rule that helps determine salary levels in a more rational way.
The newly-devised methods of distribution for State enterprise managers in recent years, such as the annual pay system and bonus grant, lack the support of a comprehensive framework. They need to be more regular and standard.
Another problem is that private firms have not been effectively supervised by trade unions, industrial associations and the law. The salary of workers in those private enterprises cannot be securely guaranteed.
Besides, the restructuring of State enterprises have churned out a large number of redundant workers, whose lost welfare granted in the past has not been properly settled given the country's immature social security system, said Zhang Liqun from the Development Research Centre under the State Council.
As a result, at the micro-level, the distribution mode has affected the efficiency of those firms, the article said.
On the other hand, the income gap has become a conspicuous social problem at the macro-level.
This income gap is manifest between urban and rural areas and between different regions, industries and social groups.
Although China has been making efforts to promote equality in income distribution, the problem demands more effective solutions, the article said.
For example, despite the consensus that labour, capital or managerial know-how can participate in income distribution, people disagree how to introduce those elements in distribution. It will take a longer time to hammer out a feasible framework in that respect.
The solution of the macro-level problem in income distribution will depend on the policymakers' proper dealing with such issues as the "dual economy" between the urban and rural areas, the regional imbalance in economic development and breaking of monopolies, the article pointed.
And experts said improving the income redistribution system is urgent. It is effective in narrowing the income gap between different social groups to a reasonable margin. China still needs to adjust its individual taxation and property systems.
The minimum income level subject to taxation should be raised to lessen the financial burden on low-income earners.
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