income inequality

Description

At the 3rd Plenary Session of the 18th Chinese Communist Party (CCP) Central Committee, new economic and political lines are likely to be announced. The assembly is scheduled to be held in the latter half of 2013. Reportedly, the drafting of central reform plans are under way, involving seven areas. The scheme will be presented to the 3rd Plenary Session for approval. If passed, the plans will be launched early in 2014. Political observers indicate that the seven reforms plan does not cover state-owned enterprises (SOE). There are no signs that the CCP top leadership is planning to reform the political system. Reportedly, the CCP Central Committee has set up seven independent steering panels. These leading groups take the lead in drafting reform schemes, for seven areas. These include the financial sector, fiscal system, land use rights, pricing of factors of production, simplification of administrative approval procedures, income injustice, and household registration system. CCP leader Xi Jinping is reported to have taken the helm. After assuming office, Xi has repeatedly emphasized CCP control over the economy. In his first southern tour in Guangzhou, he held an economic forum. In April, the CCP Politburo Standing Committee members were convened to discuss economy. Media reviewed that these seven reform plans aim to get out of the current difficulty, to revitalize China. The current plight includes growing corruption, excessive investment, and risks from local debts. Critic Wu Fan has remarked that China has by far been riddled with social conflicts. It thus drove the CCP authorities to initiate reforms. Hong Kong's Ming Pao newspaper quoted He Keng, former deputy chief of China's State Statistics Bureau. He said that the current priority is the reform of income distribution, and the financial system. He stated that China's income inequality has been ranked at being at the forefront globally. The problem has caused insufficient domestic demand, and triggered massive social conflicts. In 2011, China's National People's Congress conducted surveys and presented suggestions on this issue. In 2012, the State Council put forth a relevant reform plan. However, He Keng indicated that income inequality has involved many interest groups. Courage and resolution is needed in carrying out the reforms. This can help break through restrictions put in place by interest groups. Wu Fan, critic: "The CCP's reform will involve a wide range of interest groups. The reforms involve the economy, salaries, employment, or modes of economic development. This will affect interests of lots of people, including officials. Will they be willing to give up their interests? They won't!" In February, the CCP authorities issued an official opinion on the deeper reformation of the income distribution system. However, concrete policies are yet to be offered. Wu Fan: "Financially, the state banks have always provided loans to consortia and large SOEs. They have rejected lending to those in-need private enterprises which would really make wealth, and boost employment. The bank rejection has forced the private enterprises to repeatedly seek underground loans. Furthermore, the authorities combat these underground banks. As a result, China's financial policies and system have fully played a role that serve the consortia. If this problem can't be solved, all other economic reforms are fake." In simplifying the administrative approval procedures, the State Council has cancelled and decentralized administrative approval to local authorities on 117 projects. These include some projects on electricity, coal mines, as well as oil and gas pipelines. Wu Fan: "These approval powers will be decentralized from the central authorities to the provincial level. But even it is passed down to the county level, it is still in the hands of CCP officials. For them, the first thing to consider for any approval is to ensure the interests of the CCP, and its officials. C...