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Analysis On The Impact Of Income Gap And The Corresponding Reforming Policies In China

Posted on:2013-07-20Degree:DoctorType:Dissertation
Country:ChinaCandidate:S S LvFull Text:PDF
GTID:1229330395482480Subject:National Economics
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The contradiction during distribution is the foundation of all social contradiction. The choose of the method on Income distribution will not only have a pretty influence on people’s living standard, but also the whole nation’s orientation of economic development, and will cause a lot of social problems.Since the reform and opening up, we have achieved the transition both from the traditional planned economy system to the Socialistic Economy System and from Low-income country to mid-income country. But there is also contradiction during the distribution. Unfair income distribution makes the allocation of resources less efficiency, which will discourage production and depress economic activity; what’s more, it will have a negative influence on harmonious and stable society. So we can say, fair distribution is not only an economic issue having a bearing on all people’s benefit, but also a social issue of great significance on social stability and ethnic solidarity.China’s income distribution gap is excessively wide, and it is unfair. There’s an official data shows that on one hand,26,880,000Chinese people lead a life below the poverty line, and on the other hand, there are1,110,000millionaire families in China and China has more billionaires than any country outside of the U.S.. Many scholars think that the unfair distribution in China is among the deepest which will lead china into an unstable social condition. Unfair income distribution is just like an ever-present Sword of Damocles.Actually, the problem of distribution has already cost a great attention. The report of government work given at the5th session of the11th National People’s Congress of China in2012has mentioned that in order to deepen the reform of income distribution system, we should on one hand optimize the structure of income distribution, improve the proportion of residents income in national income and the proportion of labor remuneration in primary distribution, on the other hand, regulate the order of distribution. It is necessary to protect legal income, ban illegal income, and reverse the trend of widening income gap.Based on this, reach on our country’s unfair distribution is very necessary. The research on income distribution begins with classical theory of income distribution, which is the foundation and source of the modern theory of income distribution. Principles of political economy by Ricardo in1819used to say that the yield of land...would be distributed among the owner of land...the determination of law of distribution is a fundamental problem of political economy. From grenznutze schule to Marx’s political economics, from neoclassicism to constitutional government school, as the development of economic, research on distribution is still the core subject. Either classical theory of income distribution represented by Adams and Ricardo or grenznutze schule represented by J.B. Clark and Alfred Marshall has some limit. Marx was convinced of this problem, and formed Marxist Theory of Income Distribution based on labor theory of value of classical theory of income distribution. The emphasis on the important role that labor plays has realistic and perspective directive significance for the modern theory of income distribution. Neo-Cambridge-School is the archetype of modern western income distribution theory. Their theory is based on economic growth, and pays attention to empirical analysis instead of equality of distribution. In this paper, representative views are introduced and evaluated.We also discussed the research achievement on the relationship between distribution and fairness, the relationship between distribution and efficiency, and how to choose between fairness and efficiency. During the development of human society, chase for fairness and efficiency is the process of searching for better and faster development. Distribution determines the sharing mechanism among social members. As the development of productivity, income distribution will always seek balance between fairness and efficiency.The process of institutional shift of income distribution of China productivity is also a process of selecting between fairness and efficiency. Every shift is aimed at realizing the balance between fairness and efficiency, and tests whether the system is suitable for the productivity. Since the founding of China, income distribution system can be separated into four parts. That is from equalitarianism to distribution according to work remaining dominant and the coexistence of a variety of modes of distribution, from the distribution according to work and according to production essentiality during the transition period to socialist market economy to the distribution emphasizes both fairness and efficiency. Guiding ideology, political practice and the effect of distribution system in every stage is discussed.Taking the realization of fairness as the logic starting point, we discussed the problem of income distribution in China from three aspects:First, the problem and the reason of income gap in China. Income gap in China can be separated into four parts, which is gap between urban and rural, gap between different areas, gap between industries, and gap caused by illegal income. And gap between urban and rural contributes the most. Through the analysis on the income level and income structure of urban and rural residents, we can conclude that large income gap exist both inside and between urban and rural residents. On one hand, income condition in west, east and middle areas in China has something in common; on the other hand, income gap between different areas is pretty large. Then it comes to income gap between industries, though all industries income level has increased a lot, the increasing rates are quite different. Based on these, we discussed the reason of all these income gaps.Second, the impact can be caused by big income gap. We analyzed both economic and non-economic influence caused by unfair income distribution. The economic influence caused by unfair income distribution mainly lies on economic growth, and the non-economic influence caused by unfair income distribution lies on human capital accumulation and crime rate. The result reveals that fair income distribution makes negative correlation with economic growth, crime rate and human capital accumulation.Third, the system project for fair distribution of social wealth. To make everyone share the result of society development we must build suitable financial system first. Suitable Revenue system, regular transfer payment and observable financial management system are required. Second, we must change the two element structure between urban and rural. We should break the limit of labor flow, found an employment system with free competition, and establish rural social security system. This can help narrow the income gap between urban and rural. Third, improving the public regulation especially the monopoly industries’ regulation will also be helpful to eliminate unreasonable income gap between industries. Another way is to protect the property right of labor force. The consciousness of protecting the property right of labor force should be waked up first, and then kinds of systems should be used. Only effort from both subjective and objective can realize the reasonable distribution of public wealth between the property right of labor force and the property right of capital. At last, we should make full use of informal constraints.As the deepening of the reform of market economic system, the unfairness of income, wealth and chance has grown. Today, the unfairness has surpassed any other time, and the gap presents bigger and bigger. Though we have already realized the negative influence, and made a series of policy, to solve the problem from the root, we still have a long way to go. One is to develop the productivity in order to provide a material supply; the other is to improve the proportion of middle-income earners, so that the society would be more stable.
Keywords/Search Tags:Market Economy, Income Gap, Fair Distribution, System Design
PDF Full Text Request
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