In to narrow the income gap. The issue

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Last updated: August 25, 2019

In today’sChina, whereas people’s income level and standard of living are continuallyimproving, there is still a growing disparity between the financial circumstancesof different social members. The development of a range of social undertakingsis moving comparatively slowly, and various issues relating to the day-to-dayinterests of the people, such as education, health care and housing, have notbeen adequately taken care of.

 The excessivelylarge disparity of income is a serious issue in the social development ofChina. According to relevant statistics, the income disparity between at therichest people, who represent 10 percent of the total population, and thepoverty-stricken people, who make up 10 percent of the total population, ismore than 20 times. According to the World Bank, China’s Gini coefficient isabout 0.47, as against 0.4 recognized as the warning line internationally. TheChinese government is taking aseries of measures to narrow the income gap. The issue ofincome disparity in China is manifested collectively in the following aspects:first, the income disparity between urban and rural areas.

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In 2013 the netper-capita income for urban residents in China was 26,955 Yuan while the netper-capita income for rural inhabitants was 8,896 Yuan, resulting in a ratio ofurban to rural net per-capita income of 3.03:1. Secondly, there is the incomedisparity between different regions. In 2012 Zhejiang Province had the highestnet per-capita income for urban residents (excepting municipalities directlyunder the Central Government) of 34,550 Yuan, and Xinjiang the lowest, 17,157Yuan; furthermore, Zhejiang Province also had the highest net per-capita incomefor rural residents, 14,552 Yuan, while Gansu Province had the lowest, 4,495Yuan. Lastly, there is the income disparity between different sectors. In 2012the service sector, with the highest income, had an average payment of89,743 Yuan,while the sectors with the lowest income (agriculture, forestry, animalhusbandry and fishery) had an average payment of 22,687 Yuan, a ratio of 3.

96:1. The imbalancein social development is caused by the imbalance in economic development,itself mainly manifested in the imbalance of economic development between urbanand rural areas (between industry and agriculture). Agriculture in China ismainly in rural areas while industry is mainly in cities and the developmentimbalance between urban and rural areas can be seen in the imbalance betweenindustry and agriculture. The issue of agriculture, rural areas and peasants isthe most problematic in the economic and social development of modern China.When closely analyzed, the situation with regard to agriculture, rural areasand peasants is the result of a dualistic economic structure with the long-termseparation between urban and rural areas in China, manifested in thecontradiction between a superabundant rural population and the limited andcontinuously decreasing agricultural production materials such as suitablefarming land. At present, agricultural workers account for 46 percent of thetotal population in China; the number of people involved in the primary industry(agriculture, forestry, animal husbandry and fishery) is 260 million, or 33.

6percent of the total number of employees – however, their production yield accountsfor 10.1 percent of the GDP. The imbalancein economic development is also manifested in the imbalance between differentregions. In 2012 the per-capita GDP for west China was 31,357 Yuan, that foreast China 57,722 Yuan, the ratio between west and east being 1: 1.84.

 In 2010, Chinaissued a the National Program for Medium- and Long- Term Education Reform andDevelopment (2010–2020), which calls for efforts for China to seek further developmentin education and cultivation of talents, achieving modernization in educationby the year 2020. According to the Program, more funding will be allocated foreducational development purpose.The sum was2,116.5 billion Yuan in 2012, or 4.1 percent of the 2012 GDP. Although Chinahas narrowed the gap with developed countries in this regard, some problemsremain: Case in point is the imbalance in educational resources between urbanand rural areas, between east and west China, and even between differentschools.

Children from poverty-stricken families and children of migrantworkers still have poor access to better education. The issuessurrounding medical treatment and health care are most prominently manifestedin the unreasonable allocation of health care resources. Across the country, 80percent of the health care resources are concentrated in cities; whereashigh-quality medical treatment and health care resources are excessivelyconcentrated in big city hospitals, there is a concomitant shortage ofcommunity health care service resources, and the service system of “giving priorityto prevention” and reasonable access to a doctor have not come into being. Inrural areas there is a shortage of medical treatment and health care resources.In addition, China’s health investment is insufficient, accounting for 5.

15percent of the GDP in 2011, a figure which is higher than India (4.2 percent),close to Russia (5.6 percent), and far less than other BRICS countries includingBrazil (8.8 percent) and South Africa (9.2 percent). China’s percapita GDP has exceeded US$ 6,000, which means China approaches the averagelevel of medium-income countries in the world. This is fact that China has gonefrom the transformation period to a new historical period featuring highincome. It is historical fact, having reached the level of US$ 6,000 per capitaGDP, some countries declined and some others continued to move forward.

Giventhis, China needs to find a new way of development. TheDecision of the CPC Central Committee on Some Major Issues ConcerningComprehensively Deepening the Reform adopted at theThird Plenary Session of the 18th CPC Central Committee held in November2013 stipulates in explicit terms: “We will regulate income distributionprocedures and improve the regulatory systems and mechanisms and policysystem for income distribution, establish an individual income andproperty information system, protect legitimate incomes, regulateexcessively high incomes, redefine and clear away hidden incomes, outlawillegal incomes, increase the incomes of low-income groups, and increasethe proportion of the middle-income group in society as a whole. We willstrive to narrow the income gap between urban and rural areas, differentregions and different sectors, thus gradually forming an olive-shapeddistribution structure in the country.” Generally speaking, when theproportion of middle-income group reaches 40–50 percent, it indicates that asociety has formed an “olive” structure, with the majority of people enjoyingmiddle income and the lower and high income earners forming the minority.At present, the proportion of medium income group in China makes upabout 25 percent of the population. The Chinese society will have towait to form an “olive” structure. This period is full of opportunitiesand challenges ConflictBetween Economic Development and Resources Environment China is vastin size.

However, 52 percent of its land area belong to arid or semi-aridareas. The Qinghai-Tibet Plateau, highly cold and scarce in oxygen, covers anarea of 2.4 million square km; the Loess Plateau, which suffers serious soilerosion, covers an area of 640,000 square km. In addition, Rocky desertificationcovers an area of 900,000 square km. China today boasts 122 million hectares ofcultivated land, averaging less than 0.1 hectare per capita, a figure which ishalf of the world average level. Moreover, 70 percent of the cultivated land inChina fall into the category of medium- or low-yield ones.

Land exerts a heavypressure on China with 1.36 billion mouths to feed. The economy inChina is growing very fast, but the extensive economic growth with highinvestment, high levels of energy consumption, high materials consumption, highpollution and large requisition of land has not fundamentally changed.

Inparticular, China is currently at a time of accelerated development in bothindustrialization and urbanization, and due to a comparatively high consumptionof energy and various resources and a heavy emission of pollutants, theconflict between economic development and the conservation of natural resourcesis becoming ever more prominent. In particular,the added value of tertiary industry as a proportion of GDP is 46.1 percent,higher than the secondary industry (43.9 percent).

This compares sharply withthe added value of the tertiary industry in developed countries (70 percent). At present,China has overtaken the United States and Russia to become the world’s numberone energy producer and consumer. In 2013, China’s primary energy productionwas 3.4 billion tons of standard coal while its energy consumption reached 3.75billion tons of standard coal. Moreover, China is irrational in consumptionpattern largely because it is the most populous country suffering from shortageof energy. China also hasrelatively low energy resources. At present the per-capita petroleum resourceis 17.

1 percent of the world average, the per-capita natural gas resource evenless, at 13.2 percent. Coal represents a major part of China’s natural resources,but per-capita is only 42.5 percent of the world average. In China thereis a wide but imbalanced distribution of energy resources.

Coal is mainly foundin north and northwestern China, hydraulic resources are principallydistributed in the southwestern regions, and petroleum and natural gas aremostly concentrated in the eastern, central and western regions as well asunder territorial waters. The major regions with regard to energy consumption areconcentrated in the southeastern coastal areas which have the more developed economy.The large-scale and far-distant transportation of coal from north to south, ofpetroleum from north to south, of natural gas from west to east and of electricityfrom west to east represents the distinctive and basic structure of the flow ofChina’s energy transportation. The demand forresources in China has grown fast.

In the 1990s petroleum consumption increasedat an average annual growth of 7.2 percent; that of natural gas increased at anaverage annual growth of 9.3 percent; that of steel increased at an annualaverage growth of 9.3 percent; and that of copper increased at an annualaverage growth of 11.2 percent.

Recent yeasrs saw China make efforts to takecontrolling fast energy consumption growth as a major goal, with the result thatenergy consumed in 2012 and 2013 grew by only 3.9 percent and 3.7 percent respectively. Regardingenergy technology, China has made great progress, but compared to the demandsfor development and the advances that have been made at international level,there is still a significant gap. The development of new technology in suchfields as recyclable energy, clean energy and alternative energy iscomparatively fast and the application of such technology as energy saving,consumption-reduction and pollution treatment is not nearly so wide as it mightbe.

In 2010, China’s energy consumption per-unit GDP stayed 2.2 fold whencompared to the world level, and was higher than developed countries includingthe United States, Japan and Europe. An extensiveeconomy results in low efficiency and output. The labor productivity in Chinais obviously lower than that of western developed countries.

Recent years sawfast growth of labor productivity, with the 2010 labor productivity doublingthat in 1990, which, however, was still half of that of OECD, and even lessthan Latin American countries. According to the report by the Chinese Academyof Sciences, China’s labor productivity is only equivalent to 1/12 of theUnited States and 1/11 of Japan. The seriouspollution we are currently witnessing is the result of an extensive developmentof the Chinese economy. Although China has adopted a variety of measures sothat emissions of major pollutants has decreased year by year, but theemissions remain to be a serious problem plaguing China today. In 2012, thenational wastewater COD emissions were 24.237 million tons, and thesulfurdioxide emissions in exhaust gas were 21.176 million tons.

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