Call for bigger middle-income group
By Liu Chang (China Daily)
Updated: 2006-03-06 05:39

A mature middle-income bracket is necessary for narrowing the income gap between the rich and poor, a Hong Kong-based top political adviser said during the ongoing plenary session of the Chinese People's Political Consultative Conference National Committee.

Chan Chun Tung advised the government to increase the pay of public servants to help establish the bracket.

Chan defined the middle-income bracket on the Chinese mainland as those with a monthly salary of 5,000 yuan (US$620) to 10,000 yuan (US$1,200), who have good insurance policies.

"But I am afraid that the group is still rather small on the Chinese mainland," Chan, president of Hong Kong-based Chaifa Holdings Ltd and honorary chairman of the Hong Kong Young Industrialists Council, told China Daily.

According to statistics provided by Chan, there are nearly 17 million middle-income households on the mainland, accounting for 50 million people.

He predicted that by 2010, 170 million people would be in the middle-income bracket.

In Hong Kong, the middle class accounts for half of the whole population, according to Chan.

Public servants form the backbone of the middle class in Hong Kong.

"The class is the most stable part of the society," Chan said.

"I believe that a bigger middle-class bracket is an important factor for the stability of the Chinese society," Chan said.

The middle-income bracket should be a big taxpayer group, he said.

He added: "Although incomes of public servants in the mainland increased eight times between 1985 and 2003, the governments have not increased incomes since then."

Chan advised to further enhance the pay of public servants on the mainland to promote establishment of the middle-income bracket.

Meanwhile, the social security system should be further improved, he added.

Statistics show that 80 per cent of the labourers on the Chinese mainland were not covered by endowment insurance, according to Chan.

The income of the richest is at least eight times that of the poorest in China, according to the adviser.

"Only the development of the middle-income bracket could help solve the problem and sustain stability," he said.

(China Daily 03/06/2006 page3)