Non-market Factors Of And Strategies To Reduce China’s Widening Income Gap

Income gap is a realistic topic in Economics area and it is an inevitably problem in the development process of any societies. China’s income distribution has gone through different stages:equalitarianism, breaking of the egalitarianism, and widening of the income gap. Appropriate income gap is inevitable and it can promote economic growth and social stability, but if the gap exceeds the capacity of the residents, it will dampen the enthusiasm of workers and further affect the national economy and social stability.At present, the income gap of residents in our country has significantly increased and this trend is still growing. In terms of the reasons of income gap, there are many different views in the theoretical area. This paper argues that while market factors play a role in causing income gap widening, non-market factors, especially government authority capitalization, illegal incomes etc. which are system defects caused by improper intervention of government and delayed policy construction, are more important causes. To efficiently regulate improper income gap is fundamental for development of a country, so as the economy grows, it is important to pay more attention to social fairness, and to regulate primary distribution, to improve redistribution by government and to fully utilize supplementary function of the third distribution. At present, our country has started the Twelfth Five-year plan and to reduce the development of the widening income gap between different areas and different individuals and to let the whole people share the benefits of China’s reform and opening up and socialist modernization would contribute to formation of a stable, peace and harmonious society.