Cap urged on fat-cat SOE salaries
By Fu Jing (China Daily)
Updated: 2006-07-12 08:22
The People's Bank of China (PBOC), the central bank, said last month that
urban workers earned an average of 18,400 yuan (US$2,300) last year an
annualized increase of 14.8 per cent.
But it found that the income rise
was mainly limited to SOEs and foreign-funded companies, at nearly 20 per
cent.
In the manufacturing sector, wage increases lagged GDP
growth by 5 percentage points every year between 1998 and 2003; and some
factories have not given a pay rise for up to five years.
Considering
income from corruption and monopolistic businesses, Wu Zhongmin, a researcher
with Central Party School of the Communist Party of China, has concluded that
the Gini coefficient in China has risen above 0.5.
The official level of
the coefficient an international measurement of income disparity was
0.45 last year, compared with 0.389 in 1995 and 0.417 in 2000.
A zero
coefficient represents perfect equality and 1 indicates a complete monopoly of
wealth by the privileged; and 0.4 is considered a danger level.
The
disparity and its potential social implications have attracted the attention of
China's highest leadership. Speaking during a recent discussion on income
distribution, President Hu Jintao said salaries should be market-oriented
but the nation must focus on fairness, make favourable policies for poorer
regions and crack down on illegal earnings.
In addition to capping income
in monopoly sectors, Wu Jinglian, economist with the Development Research Centre
of the State Council, has also called for establishing a comprehensive social
security system, which he said is "well within the country's financial
capacity."
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