The right to lead a good life

By Chung-yue Chang
0 CommentsPrint E-mail China Daily, March 16, 2011
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The just-concluded annual sessions of the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC) National Committee were especially important for two reasons. First, they signalled the beginning of the 12th Five Year Plan (2011-2015). Second, the new plan signals the formal restructuring of China's economy to focus on domestic development. Many believe that the end result will be momentous, in large part because of China's pivotal role in helping the world economy recover.

The economic restructuring has a special meaning for China. For example, there will be material development in the high-speed train network and other infrastructure facilities. There will also be socio-economic development with long-term significance, intended to narrow the widening income gap between the rich and the poor, to lift more people out of poverty, and to fortify a growing, strong and stable middle class.

Given the government's goal of social economic development, they will naturally have implications on the reforms in individual income tax and income distribution. Public sentiment is now galvanized over the reforms, which aim to help the poor and focus on larger policy issues of fair wealth distribution and better livelihood for the people.

The State Council, China's Cabinet, recently sent a draft on income tax reform to the NPC's Standing Committee, the country's top legislature, for approval even as the public debates whether the individual income tax threshold should be raised from 2,000 yuan ($304) to 3,000 yuan or 5,000 yuan a month or whether a more comprehensive tax reform (reducing tax brackets and simplifying tax rates) should be implemented.

Income distribution reform is the other important issue. The 12th Five-Year Plan, for example, aims to raise the annual growth of per capita disposable income by 7 percent both in urban and rural areas. Interestingly, the annual national GDP growth rate for the next five years has been lowered to 7 percent. The government has already implemented some measures to reform income distribution, including increasing the wages of low-income people, protecting legal income and cracking down on illegal earnings, and regulating excessively high incomes.

On Monday, Premier Wen Jiabao addressed a press conference after the conclusion of the NPC session. Premier Wen's remarks reiterate the importance of improving people's livelihood, a point highlighted even in his Government Work Report on March 5. The report says the income tax and income distribution reforms are key steps toward realizing fair wealth distribution and thus improved livelihood for the people.

The NPC and CPPCC sessions discussed socio-economic issues which exuded passion, reason and will - the passion to promote people's well-being, the exercise of reason to find ways for such promotion, and the will to deliver what people need.

The sessions provided the rationale for ensuring fair distribution of wealth and improvement in people's livelihood. It goes something like this: In the past 30 years, China's "creation of shared national wealth", achieved pragmatically "a footprint with every step" at a time, must "benefit all Chinese people".

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