Opinion / From the Press

A good start to close income gap

( Updated: 2013-01-24 21:55

The State statistical authority has announced China's Gini coefficient, which measures a society's income gap, from 2000 to 2012. The Gini coefficient of 2012 in China is 0.474. The result has been met with suspicion from the public and researchers, because many believe it does not match the public's observations about the income gap in Chinese society. The income gap is different from the wealth gap in China, says an article of the 21st Century Business Herald. Excerpts:

Wealthy Chinese have many means to make money. A considerable part of their income is gray and not taxed. And many of them have streams of illegal income.

The disparity in public services and social welfare is another source of the wealth gap. More importantly, this disparity is linked with an individual's social identity, such as his or her hometown, profession and parents. It is very difficult for migrant workers to enjoy urban resident welfare in housing, education and medical care. The unfairness in terms of opportunity and artificially made stagnant social mobility is another reason for China's wealth gap.

As a result, before China reforms its residence permit system, which classifies people into rural population and urban residents, it is useless to talk about the Gini coefficient. Until China accomplishes its overdue taxation reform and national wealth distribution reform, the Gini coefficient cannot reflect the true wealth gap in China.

As it stands, it is pointless to debate the official Gini coefficient and it is impossible for researchers to get an objective Gini coefficient for Chinese society. The government has had the courage to announce the sensitive figure, and it on the right track to solve the thorny problem if the income gap.

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