An Analysis Of The Relationship Between Economic Growth And Resident Income In China

Since the reform and open policy lunched, China's economy growth rate continuously keeping on a high level, from 1978 to 2006, the GDP yearly average grows 9.67%, more higher than world's average level 3.3% during the same period. Although economy grows such quickly, China inhabitants'income actually didn't have the synchronized growth. There is somewhat unharmonious between economic growth and the inhabitants'income. Part of inhabitants have not shared the achievement of economic growth, causes many social and economic problems. Therefore, the relationship between economic growth and resident income has gradually become one of the main questions which may hinder sustainable development in China.This thesis started from the theoretical and the practical angle ,researched the relationship between economic growth and resident income ,and according to the results to analysis, proposed some the political suggestions, to advance the relationship between economic growth and resident income development more harmoniously. This article mainly constitutes by four parts.The first part is the summary of historical theoretical analysis, which provides the theoretical basis for practical research. At first, introduced a famous theory called Kuznets inverted U curve . This theory was first proposed by an American famous economist Kuznets in 1955. It describes the income assignment condition which changed along with the economy developing process. Kuznets believed that, the income gab changes due to a series of economy, politics, the society and the population at a time. There are many factors which may expand the income gab, simultaneously, also exist some causes may gradually relaxing this negative tendency. To draw a conclusion, in preliminary stage economic growth may enlarge income gab, over time, it will return to a reasonable level. Secondly, the article introduced institutional supply theory which originate from institution economics. This theory believed that, only institutional supplies meet to its environment demand can cause the change of institution, otherwise may hinder the economic development. This theory is an important theory basis for China's reformation, also can unceasingly impel the reform of income distribution system. Finally, this article has quoted the Marxian theory on capital accumulation and income assignment. Marx believed that, capital accumulation can polarize the residents and may create social rebellion. This theory happen to partly hold the same view with the Kuznets inverted U curve , but as to the development tendency for a long time, we still needs further study.The second part give a judgment of the relationship between economic growth and resident income. The paper had defined the indexes of the economic growth and resident income, in which economic growth mainly uses the GDP, and uses state statistical bureau stipulated income index as our definition. After clear the index, the paper try to reveal the relationship between economic growth and resident income: The relationship between economic growth and resident income is poor. We can divide the history into two stages. 1979-1992 is the first stage. After reform and open policy lunched our economy grew rapidly, the income of inhabitants has a large scale enhancement. Between the city and countryside has the certain in come gap, but it could be accepted. 1992 until now is the second stage. This period, the growth of inhabitant income throughout lower than the growth of economy, meanwhile ,the income gap between cities, countries, the city and countryside, the industries, and areas were larger than ever. After that this paper analyzed the present situation from two angles: From the total amount of income. From 1979 the amount of our inhabitant income grew as well as a high level of economic growth(about 10%), but the growth rate of resident income is obviously is lower than the rate of economic growth. Regardless of the way of calculation city and countryside inhabitant all lower than the economic growth, and the gap between them get larger and larger. Although the growth rate of resident income has promoted, but it still has a long way to catch up with economic growth, especially, the income of countryside inhabitant. From the structure level, the low income crowd still accounts for a big proportion in China. The inharmonic relationship between economic growth and resident income causes the expense and the investment growth uncoordinated and creates many social problems.The third part analyzed the reason of relationship between economic growth and resident income problem. We believed, relationship between economic growth and resident income is tally with the theory. The reason of income problem has its institutional factors, also has development factors. This article holds that the income gap tendency will be enlarged for a long time, and at least will not be able to reverse in the future 5 - 10 years. But, this certainly did not indicate our country inhabitants will receive the gap to be able endlessly to continue. Along with the income distribution system consummation, China will gradually to achieve a relatively fair condition; This paper studied the problem from three aspects : regional, population, and institutional factors. Speaking from regional factors, there are several reasons. The initial condition of different areas was different, which created different gain in reformation process; The arrangement of opening order also cause regional difference; The southeast inhabitant enjoys more benefits from overseas trade than other areas; Different local education development level causes the value of labor different. Speaking from the population factors, China have a large population, the labor supplies in the majority of industries are excessive, and wage level is much lower than other countries. All above, cause the wage level especially labor price grows particular slowly. Speaking from the institutional factors, the reformation of economic system, still is in run-in stage. Many institution supplies insufficiency or not standard. Distribution policy lag, labor income in primary distribution still lower, in the redistribution, state's macro-control system is still insufficient.The fourth part proposed suggestion on relationship between economic growth and resident income. Mainly is: Consummates educates and employment system, endue all people have a fair beginning; Perfect wage system breaks the original low price labor force policy, animate innovation work; Flesh out distribution according to work system, strengthens macro-control on distribution of product elements, maintains a fair assignment order; Perfect redistribution system, improve the tax system and social security system; Regulate the income of monopoly industries and introduce competition mechanism; Improve the distribution of income support system, particularly ,raise the income of farmers and narrowing the gap between regional economic development.