China Moves to Combat Income Inequality

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Much has been said about China’s recent proposal  to combat raging income inequality, offering unspecific promises to increase incomes of the low paid and halt the accumulation of wealth through corruption.

However laudable these aims may be there are few concrete initiatives in the plan that will attempt to change the status quo and not a single project is being discussed to limit corruption.

The creation of this plan to lower income inequality went through many months of extensive talks, with the main focus of these debates being the effect the scheme would have on businesses owned and run by the Chinese State. Pushing through the program would have undoubtably faced issues from many of those at the top of the income bracket, who naturally do not wish to relinquish their income for those who are less well off, as the delays indicate.

Few will disagree that the state affiliated political elite, ruling classes and wealthy families in China receive swarms of perks that those in the private sector do not enjoy and any attempt to curtail their often unachieved influence over the state owned corporations will be a move in the right direction.

Key components of the income plan are the promise to ensure that state owned businesses must, by the end of 2015, increase the payment they make to the government by five percent and thereafter give the surplus to social welfare programs. Alongside this commitment more spending has been guaranteed to social programs, education and training those at the bottom of the income spectrum for high paying jobs.

Few will disagree that the state affiliated political elite, ruling classes and wealthy families in China receive swarms of perks that those in the private sector do not enjoy and any attempt to curtail their often unachieved influence over the state owned corporations will be a move in the right direction. It is yet to be seen if this plan will have the intended effects it purports to achieve, however for rural farmers in China, even a relatively minor increase in income could massively alleviate their financial woes.

By Finbarr Toesland

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