The authorities are making the correct decision to increase people's income, says a signed article in Shanghai Securities News. An excerpt follows:

The Ministry of Labor and Social Security is launching a five-point program to raise employee income. It has been welcomed by many though there are worries that the salary increase would weaken China's international competitiveness.

The worry is unnecessary. Workers' salaries should retain a proper ratio with economic growth. The economy will be hurt by increased labor costs if the ratio is too high while consumption will suffer if salaries are too low.

Salaries in China have been relatively low for a long time.

A recent figure from the International Labor Organization indicated that per capita output in China grew 63.4 percent between 2000 and 2005, but salaries did not have comparable growth. This is believed to be the cause of the long-term sluggish consumption.

A World Bank report reached the same conclusion in February, saying that low consumption was the result of low salaries rather than the high savings rate of Chinese families.

A fact verifying this conclusion is that domestic consumption has remained at a relatively low level despite continuous State efforts since the 1990s to stimulate consumption.

The primary issue to address now should be the weak consumption caused by salaries lagging far behind economic growth.

With the economy maintaining its high-speed growth for more than two decades, it is time for the Chinese people to share the fruits of economic prosperity.

(China Daily May 25, 2007)