Bridging the income gap

Economist makes case that new distribution must increase rural incomes and use taxation that favors the majority

Reform of the nation's controversial methods of income distribution was the center of the agenda at this year's session of the National People's Congress (NPC) that concluded Sunday. In his government work report to the top legislature, Premier Wen Jiabao vowed to incorporate more into the share of national revenues by continuing to develop the economy, but also promised to distribute it evenly based on a rational system.

Wen's remarks are a clear signal that the government knows that it must rectify wealth distribution in order to increase spending and consumption as well as improve the standard of living. It understands that closing the income gap will allow the country to transform its investment-dependent economy to a consumption-driven one.