Q: It's indisputable that the policy of encouraging some regions and people to get rich first has widened the gap between rich and poor, though it is the last thing the Chinese Government wants to see. It is also reported that China's Gini Coefficient has surpassed the international alert level, which is likely to give rise to hatred of the rich by the poor. What does the Chinese Government think of this and what will be done to prevent it from further widening?
A: To a certain extent, disparity between rich and poor is inevitable in the development of an economy. It takes time to encourage some people to become rich first and then further achieve a common prosperity, and China is on the way. There is no such reform that can benefit 1.3 billion people at one time. The situation must be one of some people benefiting more from the policy, and others less. But on a general level, the livelihood of Chinese people has been widely improved.
Meanwhile, it is observed that the wealth gap between urban and rural residents is growing wider. Some urban movers and shakers can earn as much as millions in a year. But as long as a person is doing legitimate business, they deserve respect for making a fortune via their own talent and ability. However, there are some people making money through moonlighting and corruption, and the government is determined to stamp out such activities.
Chinese people have long emphasized egalitarianism, and there's an old saying that goes, "Inequality is much worse than insufficiency." The thought is that to be equalized is to be fair and disparity is unjust. As a result, the widening wealth gap has bred hatred toward the rich.
This gap also mirrors the lack of means and functions for distribution and redistribution. To solve the problem, we are intensifying our efforts in perfecting the social security system to help the disadvantaged. In rural areas, more are being done in poverty alleviation. The central finance has increased input in rural infrastructure construction to improve the production and living in the countryside. In urban areas, we have established a minimum living standard guarantee system, which covers more than 20 million people. As well, more job opportunities are created to help laid-off workers get reemployed as soon as possible.
On the other hand, the government is working to deepen reform of the income distribution system to settle the distribution problem at its primary stage. Legal, economic and administrative means will be adopted in this regard. For instance, the benchmark of nontaxable income would be raised to reduce the tax burden on low-income earners. In the meantime, special consumption tax will be levied on luxury consumer items such as luxurious housing, limos, expensive clothing and cosmetics, costly banquets, pets and over-the-top entertainment. Revenues of the special consumption tax will be used to set up a fund for poverty alleviation in order to narrow the wealth gap.
In addition, China has openly pledged to concentrate on building a prosperous society with a higher standard in an all-around way to the benefit the more than 1 billion people in the first two decades of this century. Fully aware of the possible negative effects that the widening wealth gap might bring to China's economy and society, the Chinese Government is shifting its policy of encouraging some people to become rich first to the goal of building an overall well-off society.
Tibetan farming family goes on a sightseeing trip in their own car to Lhasa, capital of Tibet Autonomous Region.