Dai Yuanchen, an economist, strongly opposes the proposal of increasing public servants’ salaries to stimulate consumer spending. Dai said China, suffering high unemployment and low income in rural areas, should refrain from raising civil servants’ salaries so that money can be saved for compulsory education in the country, something that would both relieve farmers’ burdens and stimulate consumption.
Dai gave his view at a recent forum on macro economy jointly sponsored by Chinese Academy of Sciences and Zhongchengxing Credit Assessment Company. Dai said there are many measures to expand consumption. As China at present faces many problems, especially high unemployment and poverty in the countryside, increasing salaries -- which has been done twice -- is not necessary and the third raise cannot be effective in increasing consumption. More over, a salary increase costs 100 billion yuan (US$12 billion) each time, and the added pay is difficult to lower, so it perhaps restricts future macro-adjustment and control.
“The first time China raised salaries, I raised both hands to support it; the second time, I raised one hand to support and the other hand to oppose; if the salaries are increased this year, I will raise both hands to oppose it, ” said Dai. “One raise costs 100 billion yuan (US$12 billion). If the money is spent on rural compulsory education, it will ease farmers’ burdens and resolve the problem of rural compulsory education.”
Dai added that farmers’ low income results from a lag in reform in the country. Farmers, rather than the government, assume the rural compulsory education costs, which reduces their incomes. Dai called on the government to take on the costs of rural compulsory education.
According to experts participating in the forum, farmers’ income remains at a low level, having increased only 4 percent in the past five years whereas urban residents’ income increased 8 percent over the same period. And, the low income of farmers restricts further economic development and adversely affects social security.
(南方网 [southcn.com], translated by Feng Yikun for china.org.cn April 22, 2002)