China needs 'full-scale' reform to fight inequality

  • Express bus drivers say crashes not entirely their fault
    Express bus drivers say crashes not entirely their fault

    KUALA LUMPUR, April 24 — Swift enforcement and a proper monitoring system must be put in place as bus drivers and passengers shared their views over the Transport Ministry’s latest guidelines on... …

  • MH192’s number three main wheel burst during take off, says Hishammuddin – Bernama
    MH192’s number three main wheel burst during take off, says Hishammuddin – Bernama

    Preliminary investigation findings on the Malaysia Airlines (MAS) flight MH192 incident has revealed that the number three main wheel of the aircraft had burst during take off. Acting Transport Minister Datuk Seri Hishammuddin Hussein (pic) said the aircraft was currently grounded at the MAS Engineering facility in Kuala Lumpur International... …

  • Bible banned from Pahang hotel rooms – Bernama

    The Pahang Islamic and Malay Customs Council (MAIP) has prohibited hotel proprietors in the state from placing religious reading materials of other religions other than Islam in their rooms. According to MAIP deputy president, Datuk Seri Wan Abdul Wahid Wan Hassan, a letter of prohibition on the matter had been sent to 147 hotels across the... …

  • Pre-lim report to ICAO not public, yet

    Malaysia has yet to decide on whether the preliminary report on the MH370 incident submitted to the International Civil Aviation Organisation (ICAO) will be made public.   "We have issued the preliminary report. We've sent it to ICAO but we have not made a decision to release to media or the public," Department of Civil Aviation Chief Azharuddin Abdul Rahman said during a press conference in Kuala Lumpur.   Asked again on why it will not be released to public, although it is common practice, …

  • Take second job to tackle household debt, urges AKPK – Bernama
    Take second job to tackle household debt, urges AKPK – Bernama

    The Credit Counseling and Debt Management Agency (AKPK) has urged Malaysians to take a second job to help them tackle the high rate of household debt. Chief executive officer Koid Swee Lian (pic) said those in the teaching line, for example, could give extra classes to earn more money. "Teachers could earn more money by giving tuition to... …

  • International team probing MH370 to be finalised next week, Hishammuddin says
    International team probing MH370 to be finalised next week, Hishammuddin says

    KUALA LUMPUR, April 23 — Malaysia expects to finalise by next week the list of members on the independent team of experts commissioned by Putrajaya to carry out an extensive probe on the... …

China's stated aim to narrow the income gulf between its sports-car driving elite and vast numbers who still live in poverty will need radical political and economic changes to work, say economists.

Long-delayed "proposals on the distribution of income" were announced this week ahead of Sunday's Lunar New Year, as hundreds of millions working in cities returned to their rural homes, many without running water or heating.

Beijing promised to improve the lives of these rural migrant workers, who are denied equal access to health, education and housing services in cities under a half-century old system of residency permits known as "hukou".

"Migrant workers from rural areas will be assisted to register as citizens and entitled to all basic public services in the cities," according to the measures quoted by the official Xinhua news agency.

But the aspirational document was generally short of concrete steps.

Tax reductions will be "promoted" for low- and middle-income earners, it said, and the government will "target" reducing the number of people living on less than $1 a day by around 80 million by 2015.

In 2011 Xinhua said 150 million Chinese live on less than that, a stark contrast to the country's image as the world's manufacturing heartland, the holder of its biggest foreign exchange reserves and a motor of global recovery.

The extent of inequality in China, particularly between urban and rural areas, saw authorities refuse to publish the country's Gini coefficient, a commonly used measure of inequality, for more than 10 years.

In December a research centre which operates under China's central bank said its Gini coefficient stood at 0.61, one of the highest in the world. A Gini figure of zero represents perfect equality of income and 1 total inequality.

Last month China's government said the figure was 0.47, higher than the United States, and above the 0.4 figure widely cited as a "danger level" for social discontent.

Research centre director Gan Li questioned the official statistic, arguing that the government "has not published the percentage of people who refused to answer" and "the richer they are, the more likely they are to refuse to answer".

Like other economists, Gan believes the authorities underestimate the incomes of the wealthy, who hide a significant portion of their earnings.

China has seen an explosion in its luxury goods market -- which grew 56 percent last year -- as Western makers of products from designer handbags to yachts and supercars pile in.

The boom casts doubt on government statistics saying the top 10 percent of earners had an average annual income of 59,000 yuan ($9,500) in 2011, economist Wang Xiaolu said recently in Caijing, a respected economics journal.

"Solving the income distribution issue requires full-scale reform," he wrote on his blog.

Aware of the growing resentment against the rich and endemic corruption, the Communist Party is urging officials to be frugal, pledging strict controls on government spending on banquets, car purchases and overseas travel.

But many observers say that fundamental tax reforms are essential to create more equal income distribution.

China should introduce a national property tax and inheritance tax, economist Hu Xingdou of the Beijing Institute of Technology told AFP.

The government plan said only that property tax, which some cities have been experimenting with, will be extended, and inheritance tax will be introduced "at the appropriate time".

Local governments derive much of their income from land sales, leading to many farmers being evicted from their land and compensated below market rates.

The newly released plan says that farmers will be "guaranteed proceeds" from land sales, but Hu called for greater changes to China's system of property rights, where all land is officially owned by the state or rural collectives.

"Farmers should be able to develop or sell their land, which is their collective property," he said.

Mao Yushi, a guru of economic liberalisation in China, called for reforms to the financial system, where firms with close connections to the state receive the vast majority of bank loans, leaving small-business owners short of capital.

"The princelings can go to the bank and get money just on the strength of their status and get rich on this basis," he said, referring to the children of members of the communist elite.

"The two-tier society of rich and poor is everywhere. The distinctive characteristic of China is people who have special powers and bully others."

Follow @YahooMalaysia on LINE for daily news updates.

Comments on Yahoo pages are subject to our link to Comments Guidelines. You are responsible for any content that you post. Yahoo is not responsible or liable in any way for comments posted by its users. Yahoo does not in any way endorse or support comments made by its users.

  • MH370 passenger’s partner tells of strange email from sacked Fox officer The Malaysian Insider
    MH370 passenger’s partner tells of strange email from sacked Fox officer

    The partner of an American passenger aboard the missing Malaysia Airlines flight MH370 has spoken about how a Fox executive who was recently sacked by the news station had contacted her offering to raise funds on her behalf. Sarah Bajc, whose partner Philip Wood is among the 239 people on board the missing plane, told the Sydney Morning Herald... …

  • The Poop on Pooping: 5 Misconceptions Explained LiveScience.com

    Here is the truth behind five common misconceptions about defecating. Misconception No. 1: Daily pooping is normal, and optimal. …

  • Dr Ling’s son chose wine over woman, court hears The Malaysian Insider
    Dr Ling’s son chose wine over woman, court hears

    The son of former MCA president Tun Dr Ling Liong Sik today reached an out of court settlement with his ex-girlfriend in a breach of contract suit over seven properties registered under their joint names. Ling Hee Leong and businesswoman Teh Chee Yen agreed to settle out of court after he took the stand briefly and testified that he had chosen... …