Economy

China to tackle yawning wealth gap by hiking minimum wage

(Xinhua)
Updated: 2010-06-11 14:37

In line with the policy "to make some people get rich first" initiated by the late leader Deng Xiaoping, China's economy has witnessed amazing booms but also faced an increasing disparity of incomes.

China's Gini coefficient, which is widely used to evaluate a country's gap in wealth, has risen from around 0.3 in the early 1980s and exceeded the warning line of 0.4 in 2000. By 2010 it had reached 0.48.

Further, there has developed a consensus among China's scholars that a rational and fair distribution of national income will help stabilize and maintain a harmonious society.

Also, the restructuring of the national income distribution has increasingly gained the attention of Chinese leaders. President Hu Jintao said earlier this year that the government must increase common residents' incomes and move towards a more consumer-led economic growth.

Related readings:  Minimum wage hike becoming the norm  Minimum wage hike to bridge income gap  Shenzhen to raise minimum wage by 10%  Experts call for narrowing of wealth gap  Tax system widening the income gap

Premier Wen Jiabao also mentioned, in his government work report to the country's top legislature and in an exclusive interview with Xinhua, that reforms on national income distribution must be enacted.

Since there are few options for the government to adjust the primary distribution of national income, experts have suggested that more employment opportunities should be created for low-income citizens.

"The government should make out policies to encourage the development of the service industry which could provide more jobs and constantly raise minimum wage," Hu said.

Another measure that the government should take is to increase the amount of middle-income citizens so as to make the middle class stronger, Hu added.