China May Delay Plan to Reform Income Distribution, Caijing Says
China may postpone releasing a plan for income redistribution as the government couldn’t reach a consensus on a draft by the National Development and Reform Commission, Caijing magazine reported.
The plan will be issued next year, possibly after a meeting of the National People’s Congress in March, the magazine said yesterday on its website, citing unidentified officials who contributed to the plan and academics who gave feedback. It had been expected this year, Caijing said.
Investors and analysts are focused on how quickly China’s new leadership headed by Xi Jinping will implement economic changes to spur a shift to a consumer-driven society and sustain the nation’s expansion. The state-run Xinhua News Agency said in a Dec. 13 commentary that “the public’s expectations have been raised” on issues from cracking down on corruption to improving social equity through income policies.
Caijing didn’t detail the contents of the draft. It reported previous comments by an NDRC official that regulating the incomes of executives at state-owned enterprises was under discussion.
Hu Jintao, in his last major speech as Communist Party chief last month, vowed to double per capita income by 2020 from 2010, a target that HSBC Holdings Plc estimates would signal real growth of about 7 percent a year.
China’s wealth gap is now 50 percent higher than a risk level for social unrest, according to a study by the Survey and Research Center for China Household Finance, a body set up by the Finance Research Institute of the People’s Bank of China and Southwestern University of Finance and Economics.
The Gini coefficient, an index measuring income inequality, was 0.61 in 2010, the center’s study showed. The index ranges from 0, which represents perfect equality, to 1, which implies perfect inequality. Readings above 0.4 are used by analysts as a gauge of the potential for social disturbances.
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