Income Distribution System Reform
收入分配改革(shōurùfnpi)
Related buzz words:
Income Gap

"收入", shouru, income; "分配", fenpei, distribution; "改革", gaige, reform. The reform of the income distribution system has been a headache for Chinese society for a long time. It is rooted in the huge income gap among the different classes of Chinese people. For example, while public servants and people working for public agencies have relatively high salaries and a promising future, migrant workers and farmers have very limited channels to lift their income. Additionally, the latter is excluded by China's social security system which definitely worsens their situation.

At the beginning of China's reform and opening which began over three decades ago, the central government adopted the national strategy of focusing on developing the manufacturing sector. Since then, farmers have had to work hard to ensure a material supply for the country’s industrial development. Farmers have contributed much to the development of the Chinese economy, but have gained little. Aside from the income gap between rural residents and their urban counterparts, people in cities also have great gaps in income levels.

The income gap between people living in different regions is also tremendous. While eastern provinces have realized economic prosperity by developing private companies and opening to the outside world, people living in central and western provinces are still striving to support their families. That's why the Chinese government started the "go-west project" ten years ago. But the regional income gap still exists.

Currently, the reform of the income distribution system is focused on reforming China’s taxation system. According to an EO report, though Chinese officials have formed a consensus on reducing the tax burden for people with medium-level and low income, they remain uncertain on how to tax wealthy Chinese.

Furthermore, the Chinese government has been long criticized by occupying too much wealth. Though a tax cut is perceived to be an effective way to reduce government revenue, it will play a limited role in directly lifting people's income.

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