Economy

China to tackle yawning wealth gap by hiking minimum wage

(Xinhua)
Updated: 2010-06-11 14:37

BEIJING: With four major cities and provinces increasing their minimum monthly wage to more than 1,000 yuan ($147), China is restructuring its national income distributions to ensure a more equitable distribution of income to help create a more stable society.

The government of Shenzhen city in south China's Guangdong province announced on Wednesday that the minimum monthly wage in the country's first special economic zone has been raised to 1,100 yuan.

Earlier, the governments of the Shanghai municipality, Guangdong and Zhejiang provinces also announced they were increasing the minimum monthly wage to more than 1,000 yuan.

To decree a minimum monthly wage has been one of the few options for the Chinese government to intervene in the primary distribution of the nation's income after the country began its market-oriented economic reform in the late 1970s.

Further, on the same day that the Shenzhen city government announced its new minimum monthly wage standard, the State Administration of Taxation issued a new regulation to strengthen inspection and supervision of high-income taxpayers.

Related readings:  Minimum wage hike becoming the norm  Minimum wage hike to bridge income gap  Shenzhen to raise minimum wage by 10%  Experts call for narrowing of wealth gap  Tax system widening the income gap

"These measures have been taken on the same target, that is, to reverse the current situation of an irrational social wealth distribution and yawning gap between the rich and poor," Hu Angang, a prominent scholar at Tsinghua University, told Xinhua on Thursday.

"The raising up of the minimum wage is restructuring the primary distribution and the tightened inspection on high-income taxpayers to aid in the redistribution of the national income," Hu said.

Raising the minimum monthly wage has become an increasing trend since the beginning of the year when the government of Jiangsu, China's richest province in 2009 GDP rankings, announced the first wage hike.

So far, more than 10 provinces, autonomous regions and municipalities have also raised their minimum monthly wage standards. The new standard for Beijing is 960 yuan.