How to build China's "olive" distribution pattern? It is better to have your own opinion!

Executive Summary: A rational and orderly income distribution pattern is the proper meaning of socialist harmonious society. However, at present, China's rapid economic development at the same time, income distribution in the field of some discordant phenomena, to solve this problem with a certain degree of urgency. On the basis of analyzing the urgency, this paper focuses on the new ideas of the Sixth Plenary Session of the Sixteenth Central Committee of the Communist Party of China (CPC) on the construction of a reasonable and orderly pattern of income distribution.

Keywords: income distribution pattern, narrowing the gap, social equity

Since the reform and opening up, China's economic construction and social development have made remarkable achievements, and the people's living standard has been significantly improved, reaching a moderately affluent level in general. At the same time of rapid economic development, some disharmony has emerged in the field of income distribution, with the main problem being the unreasonable widening of the income gap. The Decision of the Central Government on Several Major Issues Concerning the Construction of a Harmonious Socialist Society (hereinafter referred to as the "Decision") sets out clear goals and tasks for resolving the disharmonious issues of income distribution: "The trend of widening disparities between urban and rural areas and between regional development will be gradually reversed, and a rational and orderly pattern of income distribution will basically be formed, with a general increase in family property and an affluent life for the people. " A rational and orderly pattern of income distribution is an important part of a harmonious socialist society, and a condition and guarantee of the people's well-being and happiness.

I. The urgency of building a reasonable and orderly pattern of income distribution

Worldwide, in the process of economic growth, income disparities between regions, between urban and rural areas, and between families are common; in the period of economic transition, the widening of the income gap and the occurrence of poverty are also typical phenomena. As a country that is simultaneously in the process of developing from a low-income country to a middle-income country and in the process of transforming from a planned to a market economy, it is difficult to avoid the existence of widening income gaps and poverty. However, if the income gap is widening too fast and unreasonable and unfair income distribution relations exist in large numbers, it must attract extensive attention from all levels of government and all sectors of society. 1981, the Gini coefficient of China's residents' income gap was 0.31, and in 2001, it increased to 0.45. According to the 2005 Social Blue Book Report published by the Chinese Academy of Sciences, the Gini coefficient of China's residents' income gap has exceeded 0.465, pushing it to 0.465 in recent years, and the Gini coefficient of China's residents' income gap has exceeded 0.465. has exceeded 0.465, approaching 0.47. Such a degree of income inequality exceeds the internationally recognized reasonable range and is at a very high level in the world.

The irrationality of China's income distribution pattern is manifested in the widening of the income gap in many aspects: first, the income gap between urban and rural residents has widened. Since the reform and opening up, the income gap between urban and rural residents has gone through a development process from rapid narrowing to gradual expansion, from gradual expansion to gradual narrowing, and then to accelerated expansion. in 1978, the income ratio between urban and rural residents was 2.57:1, in 1985 it narrowed to 1.8:1, the lowest point in history, and it rebounded to 2.86:1 in 1994, exceeding the pre-reform and opening up level. in 1997. In 1997, the income gap between urban and rural residents was 2.47:1, and then the income gap accelerated, with the ratio of the urban-rural income gap at 2.90:1 in 2001, reaching a historical high of 3.23:1 in 2003, and 3.22:1 in 2005.In 2004, the income gap between urban and rural residents, although it fell slightly, was related to the central government and the State Council's implementation of a series of policies to reduce the burdens of farmers. However, the extraordinary rise in food prices also helped, and in those two years the rise in food prices contributed more than 50 percent to the increase in farmers' incomes. If the impact of this factor is discounted, the income gap between urban and rural residents is actually still widening. Second, the income gap between regions is widening; in 1978, the ratio of per capita net income of farmers in the East, Central and West regions was 1.09:1:0.91, in 2003 it was 1.52:1:0.68, and in 2005 it was 1.60:1:0.80. In 1978, the ratio of per capita disposable income of urban residents in the East, Central and West regions was 1.10:1:1.01, and in 2003 it was 1.47:1:1.01, while the ratio of per capita disposable income of urban residents in the West and Central regions was 1.10:1:1.01, and in 2003 it was 1.47:1:1.80. In 1978, the ratio of per capita disposable income of urban residents in the East, Center and West was 1.10:1:1.01, in 2003 it was 1.47:1:1.01, and in 2005 it was 1.52:1:0.997. The income gap between the residents of the East and Center has been on a widening trend. The eastern region after the previous economic development, accumulated considerable economic growth strength, residents' income will continue to maintain a certain growth rate; the proportion of GDP in the central and western regions in the country is declining trend, the residents' income growth has been affected, if not to take more vigorous measures, the gap between the residents' income in the east, central and western regions will be further widened. Third, the income gap between workers in the industry has widened. Since the mid-1980s, when the reform of the urban economic system was in full swing, the problem of income disparity between workers in the industry has come to the fore. The ratio of per capita income between the highest and lowest industries was 1.29:1 in 1990; it reached 2.23:1 in 1995, rose to 2.99:1 in 2003, and was as high as 5.90:1 in 2005. During the Tenth Five-Year Plan period, the average wages of workers in the tobacco, electric power, gas, water supply, railroad, and communications industries increased at an accelerated annual rate. During the "Tenth Five-Year Plan" period, the annual growth rate of average employee wages in industries such as tobacco, electric power, gas, water supply, railroads and communications accelerated, rising 3 to 5 percentage points above the average growth rate during the "Ninth Five-Year Plan" period; the finance and insurance industries rose 7 percentage points over the "Ninth Five-Year Plan" period; and party and government organs and social organizations rose by more than 5 percentage points. Although the income level of employees in all industries has increased during this period, but the rate of increase is not the same, the gap between the income of employees in the industry has widened, the income of the industry has changed the ranking of the high and low, and the income gap between the monopoly industry and the general industry occupations has widened.

The factors that triggered the widening of the income gap in China are manifold, and there are both reasonable and unreasonable factors. Reasonable factors, such as the gap between distribution according to labor contribution and production factor contribution, are acceptable to people. A distribution method that combines distribution according to labor and factors of production can mobilize the enthusiasm and creativity of people's labor and input factors, and can promote rapid economic growth. People abhor improper, unreasonable and even illegal means of obtaining high incomes, the phenomenon of increasing the income of small collectives and individuals at the expense of the public interest, and the performance of some high-income earners who are unkind to the rich. Wu Zhongmin, a professor at the Sociology Teaching and Research Office of the Central Party School of China, said excitedly at an impassioned debate on the issue of "income disparity" that "income disparity has reached the point where it can't be solved without a solution, and it's time to emphasize fairness and justice."

Reform and opening up 28 years, China's original system of some unreasonable distribution of phenomena are being gradually eliminated, the distribution of income in general towards the direction of system optimization. However, some deep-rooted contradictions in the traditional income distribution system have not been fundamentally resolved, and some new irrational and disorderly phenomena of income distribution have emerged in the process of system transition. For example, the lack of government management and discipline, the growth and spread of rent-seeking phenomena, state-owned assets and government public **** income in the initial distribution of a large number of losses; some local state-owned, collective enterprise restructuring is treated as the last "free lunch" of the public economy, the public assets tangible and intangible by the private encroachment; some departments and units to take advantage of the special status of a huge amount of public ****. Some departments and units take advantage of their special status to cut off huge public **** proceeds for their own; some business operators take illegal means to seek corporate profits, suppress the wages of hired workers, and extract surplus value; some private enterprises have a weak sense of creditworthiness, serious short-term behavior, multi-book, off-book, privately set up a small treasury, tax evasion, tax leakage, tax fraud exist in large quantities, and huge amounts of tax payable are transformed into corporate profits; some state-owned enterprises and monopoly industries are not transparent about the source of income, and lack of effective restraints. Some state-owned enterprises and monopolistic industries have non-transparent sources of income, lack effective constraints, and blindly compare their annual salary income, issue a large number of subsidies, bonuses, allowances, in-kind and other out-of-system incomes, and engage in consumption of duties, which has caused serious adverse social impacts. The above phenomenon is the main reason for the unreasonable widening of the income gap in China.

In recent years, the unreasonable widening of the income gap has led to a series of incidents of hatred of the rich, attacking the rich and even killing the rich, inducing a social crisis. Driven by the wave of social informatization, openness and democratization, the sources of income of high-income groups are gradually revealed, and the sources of income of some groups that get rich by virtue of grey income are becoming more and more difficult to hide, and incidents of black income have been constantly exposed, and the income gap between the high- and low-income groups has been more and more clearly and intuitively exposed in front of the public. In the face of the unreasonable widening of the income gap, low-income groups and vulnerable groups have a very complex psychology. Some of them will blame the absolute or relative decline in their poverty and income level on the unkindness of the rich, and they even doubt the Party and the government's policy of enriching the people, shaking the confidence of the reforms and venting their dissatisfaction to the Party and the government. Laid-off workers tend to group sit-ins, blocking traffic, landless farmers tend to collective petition, besiege the local government, the enterprise turned retired soldiers again and again to find the management of collective bargaining, backward areas of some of the poor people simply to the developed areas of the theft of goods, in order to illegal and criminal means of survival. Some social contradictions and emergencies are developing in the direction of group, conflict and politics, seriously affecting social stability and social harmony. The construction of a reasonable and orderly pattern of income distribution is not only the adjustment of China's income distribution relations, but also a major project related to long-term economic prosperity, social well-being and harmony.

The new idea of building a reasonable and orderly pattern of income distribution

The Sixth Plenary Session of the Sixteenth Central Committee of the CPC put forward a new idea of building a reasonable and orderly pattern of income distribution, that is, to "improve the system of income distribution and standardize the order of income distribution". Building a rational and orderly pattern of income distribution is a systematic and complex project, and the Decision of the Sixth Plenary Session of the Sixteenth Central Committee put forward a series of policy initiatives.

First, on the basis of economic development, pay more attention to social equity. To build a reasonable pattern of income distribution, first of all, to harmonize the interrelationship between "*** creation and *** enjoyment". "*** creation" means that each member of society should be the creator of social wealth, for economic development have certain responsibilities, *** with the creation of wealth is the basic norm that all members of society should follow. "*** Enjoy" means that all members of society can enjoy the fruits of reform, opening up and socialist modernization, and that social welfare will grow in the process of economic development. We cannot emphasize "*** enjoyment" to the exclusion of "*** creation", which is a prerequisite for "*** enjoyment"; nor can we emphasize "*** creation" to the exclusion of "*** creation"; nor can we emphasize "*** enjoyment" to the exclusion of "*** creation". Nor can we talk about "*** creation" without "*** enjoyment", and regard "*** creation" as a prerequisite for "*** enjoyment"; nor can we talk about "*** creation" without "*** enjoyment", and regard "*** creation" as a prerequisite for "*** enjoyment". Nor can we talk about "*** creation" without "*** enjoyment" and regard "*** creation" as the only prerequisite for "*** enjoyment". "***Enjoyment" is not a "handout", but a fundamental right of citizens. For those members of society who are temporarily in unfavorable living conditions, the Government has the responsibility to provide the necessary conditions, to help them *** with the help of social forces to resist social risks, and to enable these members of society, through the necessary "blood transfusion" mechanism, to restore their "blood-forming" function, to overcome temporary difficulties and to enhance their ability to create social capital. Through the necessary "blood transfusion" mechanism, these members of society are able to restore their "blood-forming" function, overcome temporary difficulties, and strengthen their ability to create social wealth and return to society. The Decision of the Sixth Plenary Session of the Sixteenth Central Committee states: "Adhere to a distribution system in which distribution according to work is the mainstay, with a variety of modes of distribution coexisting, and strengthen the macro-adjustment of income distribution, with greater attention paid to social equity on the basis of economic development." An important purpose of economic development is to gradually raise the material and cultural standards of all members of society, so that all people can ****enjoy the fruits of reform, opening up and socialist modernization. The Government has the most important responsibility for "****enjoying" the fruits of reform and development, and needs to establish a set of effective "****enjoyment" mechanisms. This is because the realization of the act of "****sharing" needs to be accomplished through legislation and the formulation by the Government of a series of reasonable national income redistribution policies. The government is the main distributor of public *** income, and the "*** enjoyment" of the fruits of economic development is generally achieved through the government as the main body, organization, orientation and coordination. In the face of the reality of China's residents' income gap continues to widen, the government should pay more attention to social justice, through the rectification and standardization of the distribution order, and increase the intensity of income distribution regulation, to solve the problem of excessive widening of the income gap. While making the cake bigger and better, it should emphasize the importance and urgency of dividing the cake well, and make the income gap between urban and rural areas, regions and industries in China narrow in all aspects by constructing a reasonable order for the initial distribution and redistribution of national income.

Second, ease the trend of widening income gap, and strive to increase the proportion of middle-income groups. "Adjusting the high", "making up for the low", "expanding the middle" is the important spirit of the Sixth Plenary Session of the Sixteenth Central Committee on building a reasonable pattern of income distribution. The Decision states: "Efforts should be made to raise the income level of low-income earners, gradually expand the proportion of middle-income earners, effectively regulate excessively high incomes, resolutely outlaw illegal incomes, and promote prosperity for all". It is widely recognized around the world that middle-income groups are an important force in maintaining social stability. Through the measures of "adjusting the high", "making up for the low" and "expanding the middle", it is possible to steer China's current not-quite-reasonable "positively triangular" income distribution structure to a "positively triangular" income distribution structure. "Income distribution structure in China is currently not very reasonable to the middle-income group as the main body, more reasonable "olive-shaped" income distribution structure. To date, China has not yet formed a stable middle-income class. Within towns and cities, the tendency to centralize income and property has made it difficult for middle-income earners in towns and cities to become a stable class. The slow process of urbanization and the stagnation of productivity development in rural areas have also made it difficult for the majority of rural residents to enter the middle-income class. The focus of building a rational and orderly pattern of income distribution is to reduce the proportion of low-income earners, strive to increase the proportion of middle-income earners, reduce the Gini coefficient, and mitigate the continuing widening of the income gap among residents. Specifically, the urbanization development strategy must continue to be promoted. With the advancement of urbanization, the agricultural population will continue to decrease, and a large amount of arable land can be saved for the development of agriculture, so that the scale of land operation will continue to expand, labor productivity will continue to increase, and farmers' income will continue to increase. Insist on the parallel development of technology-intensive and labor- and capital-intensive industries to maintain long-term sustained and rapid economic development and full employment. Establish a stabilizing mechanism for the expansion of the proportion of middle-income earners, increase investment in education, and improve the system for cultivating human capital. In order to enable low-income earners to increase their incomes in a sustained and guaranteed manner, it is important to improve the quality of workers' factors, which is the key to improving their competitiveness in the labor market and thus obtaining higher labor prices. This requires promoting changes in the system of human capital cultivation and forming a rationally graded education structure and talent structure. To raise the level of urbanization, it is necessary to further reform the dual urban-rural household registration system and remove systemic barriers to the transfer of rural populations and populations from impoverished areas; and to reform the land-use system and accelerate the market-based transfer of agricultural land-use rights.

Thirdly, the legal system should be strengthened and the chaotic distribution order in the public *** sector should be strictly rectified. The law regulates the reasonable and orderly pattern of income distribution in the two aspects of legislative regulation and judicial regulation. Legislative regulation includes minimum wage legislation, legislation on the protection of workers' rights and interests, social security legislation and so on. At present, China's national income distribution system, there are inadequate legislation, to take active measures to speed up the pace of legislation, with uniform regulations to constrain and regulate the income distribution behavior of all sectors and all classes of society. Justice is the guarantee for the implementation of the law. The rational and orderly distribution of income depends on judicial supervision and inspection; the judiciary guarantees the implementation of the laws and regulations enacted in order to resolve disputes in the areas of income distribution and social security, adjudicate and regulate contradictions related to the distribution of income, and combat and outlaw illegal incomes. In the current period, it is necessary to strengthen the legal supervision of the distribution of income in the public **** sector, and to prevent the tendency of the public **** sector to convert public **** interests into welfare benefits in the form of remuneration for small groups and individuals. Increase the reform of monopolized industries, liberalize market access, encourage fair competition, control the excessive growth of income of employees in monopolized industries, and explore mechanisms for transferring the excess income of monopolized industries to the entire population. Further improve and standardize the wage system for national civil servants, and while promoting the group of civil servants as a stable middle-income stratum of society, prevent excessively rapid and substantial increases in the treatment of civil servants, and alleviate the contradiction between the incomes of the public **** sector and the non-public **** sector. The income distribution behavior of state-owned enterprise operators should be effectively monitored to avoid the misappropriation of quality assets of the entire population in the name of strategic adjustment of state-owned assets, and the annual salary system should be prudently designed so that it can play an effective role as an incentive. The Decision states, "Improve the national unified salary system for civil servants that combines position and rank, standardize the standards for regional allowances and subsidies, and improve the system of allowances for difficult and remote areas." "Strengthen the guiding role of enterprise wage guide lines, labor market price levels, and industry labor cost information on wage levels." "Regulate the incomes of business managers in state-owned enterprises and determine a reasonable ratio between managers and employees." "Accelerate the reform of monopolized industries, adjust the distribution relationship between the state and enterprises, and improve and strictly implement the system for controlling the total amount of wages." These policy propositions are all important measures to standardize and rectify the order of income distribution and should be implemented. At present, the disparity between the rich and the poor caused by economic violations and corruption is of such a serious nature that the people are strongly dissatisfied with it, and it must be dealt with in accordance with the law without delay. For the embezzlement of public property, tax evasion, bribery, bribery, power and money transactions must be resolutely punished in accordance with the law.

Fourth, emphasize the reform and construction of the tax system, improve the tax collection and management system. The focus of the tax system construction and tax regulation should be to effectively regulate the excessive income of high-income groups and prevent the excessive growth of unreasonable and gray income outside the system. At present, value-added tax (VAT), enterprise income tax (EIT) and business tax (BT) are the main sources of tax revenue in China, accounting for about 2/3 of the total tax revenue. Such a structure of tax revenue sources is not conducive to the effective regulation of the widening income gap among residents. In the future, under the premise of unifying the tax level of domestic and foreign enterprises, attention should be paid to the role of personal income tax and consumption tax in regulating income distribution. The Decision states, "Implement a personal income tax system that combines comprehensive and categorized taxation, and strengthen the collection, management and regulation." On the one hand, excessive income will be regulated through the determination of a reasonable personal income tax base, tax rates and other items and the establishment of an effective collection and management mechanism to raise the proportion of personal income tax in all tax revenues; on the other hand, the welfare level of the middle- and low-income classes will be raised through the improvement of the social security system. In order to improve the welfare of farmers, the abolition of the agricultural tax should be accompanied by a strengthening of the collection and management of the cultivated land occupation tax, and ensuring that the revenue from this tax is ultimately compensated to farmers who have lost their land. For the regulation of high income, in addition to the use of personal income tax, new taxes such as property tax and special consumption tax should be introduced as soon as possible. Property tax is a means to regulate income by taxing the income gap caused by the difference in property possession. China's income distribution pattern, which is dominated by labor income, is being changed, and residents' property income is growing rapidly. According to relevant statistics, in 2004, the property of the 10% of families with the highest incomes accounted for nearly half of the total property of urban residents, the property of the 10% of families with the lowest incomes accounted for only about 1%, and 80% of middle-income families had only half of the total property. The share of property-based income in residents' household income and its impact on the wealth gap is on the rise, exceeding the impact of wage income on the wealth gap. The real purpose of levying property tax is to improve the fairness and efficiency system of the whole society, to alleviate the trend of widening the gap between the rich and the poor due to the unequal possession of property in the society, and to embody the value orientation of social justice.

Fifth, accelerate the construction of the social security system, improve the urban and rural minimum subsistence guarantee system. In countries where the market economic system is relatively perfect, the market plays a fundamental role in regulating the wages and incomes of laborers. Due to the spontaneous tendency of the market and the differences in the talents and abilities of individual workers, the level of personal income is inevitably different. In order to protect people's basic livelihood and realize the goal of equity, social security plays an important role in regulating personal income disparity. China's social security system has been initially established, but with the development of the market and the deepening of institutional reform, the forms of employment for workers are becoming increasingly diversified. With the massive transfer of rural labour to cities and towns, the issue of social security for rural migrant workers is increasingly coming to the fore; with the increase in the number of laid-off workers in State-owned enterprises, self-employment and employment in non-public enterprises have become the main routes for urban workers; and it is necessary to incorporate into a unified social security system the security of the old-age pension, medical care and employment of landless peasants. The single social security system, which is divided between urban and rural areas and is dominated by urban public enterprises, is no longer able to adapt to the changing forms of labour and employment that are constantly evolving, because of its small coverage, narrow channels of funding, and low degree of socialization of management services. In accordance with the principles of unity of rights and obligations and greater emphasis on fairness on the basis of economic development, it is essential to gradually establish, through reform, a multi-level social security system that meets the requirements of the new economic system and covers all citizens. The Decision emphasizes: "Improve the social security system to guarantee the basic livelihood of the masses." In building and improving the social security system, the Government should give top priority to solving the problem of absolute poverty. This part of the population is struggling to survive and is life-threatening without timely help. The Asian Development Bank suggests that China should quickly establish a rural "low income" system to fundamentally solve the problem of feeding people with an annual per capita income of less than 680 yuan. This system would cost about 4 billion RMB per year, which the state coffers are well positioned to absorb. In China, the vast majority of the urban population has already been included in the low-income insurance system, and it should be said that the problem of subsistence for the absolutely poor in the cities has been largely solved. The current work should be to improve the distribution of low income insurance. Special subsidies and care are needed for their children's schooling, basic medical care, and adjustments in the prices of urban water, electricity, and gas, so that their living conditions do not deteriorate. With the two "low income" systems in urban and rural areas, the problem of absolute poverty in China can be basically solved. From the national financial resources and the implementation of all levels of government can be achieved in the short term.