The main reasons for the serious inequality of income distribution in China are the abnormal income gap between urban and rural areas and the regional income gap. In China, the income gap between classes in the pure sense is not serious.
For today's China, "fairness" and "efficiency" are complementary, not a trade-off. Improving income distribution will not only damage economic efficiency, but also promote the healthy development of the national economy, and allowing inequality to continue to deteriorate will certainly undermine the premise of sustained economic growth.
In the short term, it is unrealistic to narrow the gap between urban and rural areas by increasing the investment in rural and underdeveloped areas through central financial transfer payments. In fact, the most effective way to control the widening income gap between urban and rural areas and regions is to break the barriers of population mobility and "liberate the feet of China people".
Basic judgment
Based on some authoritative research results at home and abroad, we can draw a conclusion: since the reform and opening up, the wealth distribution in Chinese mainland has undergone tremendous changes, and the inequality of wealth distribution has been expanding. China has rapidly changed from a country where wealth is distributed in relatively equal to one of the most unequal countries in the world. In such a big country, it is rare, if not unique, for the Gini coefficient to rise so high in such a short time.
At present, there is no convincing estimate of Gini coefficient of Chinese mainland residents' income distribution. The conclusions of various related studies are quite different, and the estimated price is between 0.39 and 0.55, but most researchers think that 0.45 is a reasonable estimate of Gini coefficient of income distribution of Chinese mainland residents. According to the internationally accepted view, countries with Gini coefficient over 0.4 belong to countries with extremely unequal income distribution. Chen Zongsheng's research shows that once the Gini coefficient exceeds 0.43, inequality will threaten social stability.
It is almost unanimous that the main reasons for the serious inequality of income distribution in China are the unusual income gap between urban and rural areas and the regional income gap. In China, the income gap between classes in the pure sense is not serious.
Few countries in the world can surpass Chinese mainland in the unequal distribution of wealth between urban and rural areas. Countries famous for their uneven distribution of wealth, such as Brazil and Colombia in South America, the Philippines and Thailand in East Asia, and India and Bangladesh in South Asia, are far less unequal in urban and rural wealth distribution than China! According to the calculation of the World Bank, the per capita income ratio of urban and rural residents in China is 2.5, which is obviously higher than the average level of other low-income countries in Asia (1.5) and also higher than the average level of middle-income countries (2.2). In fact, other researchers and research institutions estimate the income gap between urban and rural areas in China much higher than that of the World Bank.
Studies in Wang Shaoguang and Hu Angang show that even excluding Beijing, Shanghai and Tianjin, the regional disparity in China is second only to the former Yugoslavia, surpassing all other countries. In underdeveloped countries, Indian and Indonesian countries are recognized as typical examples of unbalanced development, while in industrialized countries, Italian and French countries are regarded as examples of North-South duality, but today the imbalance in China is even worse. Moreover, compared with the historical records of other countries in the world, the regional disparity in China is still in the forefront.
Basic understanding
First, "equality" and "efficiency" are unified.
Many people think that "efficiency" and "fairness" are two conflicting goals, emphasizing "fairness" will inevitably damage "efficiency", and the pursuit of "efficiency" must be sacrificed. They further believe that at this stage, the most urgent problem facing China is "how to make a big cake" rather than "how to distribute the cake". In order to further pursue "efficiency", we should continue to sacrifice "public", and it is the only correct choice that the government can make to sit back and watch the inequality continue to expand.
As far as the special national conditions in China are concerned, the above viewpoint is completely wrong. For today's China, "fairness" and "efficiency" are complementary systems, not a trade-off relationship. Improving income distribution will not only harm economic efficiency, but also promote the healthy development of the national economy. If inequality continues to deteriorate, the premise of sustained economic growth will be destroyed.
At present, the most important factor that restricts China's economic growth is the lack of effective demand, and expanding domestic demand is the most important means to stimulate effective demand when commodity exports are blocked and foreign investment is weak. But the situation of domestic demand is not optimistic. Why? One of the fundamental reasons is that the income distribution gap is too large. Economic theory and practice have proved that the more unequal the income distribution, the lower the marginal propensity to consume, so the excessive income distribution gap will inevitably lead to insufficient effective demand of the whole society. In fact, the shortage of demand we are facing today is very similar to the classical capitalist economic crisis pointed out by Marx, that is, the overproduction crisis caused by polarization between the rich and the poor. The initial strategy of capitalism to get out of the crisis is to open up overseas markets, that is, commodity export and capital export, and then adopt the strategy of state capitalism, especially welfare state, to overcome the classical economic crisis. For us, the export of goods and capital is not feasible today. The feasible way out is to expand domestic demand by improving domestic income distribution, so as to stimulate economic growth.
Second, we should use the "four income distribution theory" to see through the inequality in China.
The theory of income secondary distribution holds that the "primary distribution" of the market and the "redistribution" of the government determine the final distribution state of social wealth. However, the "four income distribution theory" challenges this mainstream view. According to this theory, the final distribution of social total wealth among all social members is formed through four distributions of market, government, non-governmental organizations and criminal activities, and the fourth distribution plays an important role in the transitional society with imperfect rule of law.
The market is the owner of the first distribution, and it is distributed according to the "efficiency principle". Social wealth is distributed to the owners of production factors in the form of wages, profits and interest. Like other countries in the world, China's initial distribution also leads to inequality.
The second distribution is presided over by the government. Theoretically, it should be redistributed through taxation and fiscal expenditure according to the principle of fairness, so as to correct the "mistakes" in market distribution. However, the redistribution implemented by China government has a prominent feature, which is "icing on the cake". In other words, people favored by the market are further favored by the government, and the group that benefits the most from government redistribution is precisely the high-income group. According to the latest statistics of the Ministry of Finance, the government's transfer payment is more unequal than market distribution.
Non-profit organizations carry out the third distribution by raising voluntary contributions and financing activities. This distribution is based on "moral principles". At present, in China, the role played by the third distribution can be summarized as "insignificant", but it did play the role of "timely rescue", that is to say, "played its due role".
The fourth distribution, the so-called "gray distribution" and "black distribution", is manifested in various criminal activities, such as theft, robbery, tax evasion, corruption and bribery. In China, there is no reasonable estimate on the scale of trading power and money, tax evasion and buying and selling officials. But there is no doubt that the damage to social justice and the legitimacy of the government is the greatest, and the degree of its harm cannot be overestimated.
Third, "economic growth", "anti-poverty" and "anti-corruption" are all "hard principles".
"Development" or "economic growth" is an absolute "hard truth". From another point of view, the biggest beneficiaries of economic prosperity are the powerful groups, so continuing to carry out the policies of "reform" and "opening up" to promote economic development will win their support for the government.
During the 20-year reform period, although the income distribution gap is expanding rapidly, the incidence of absolute poverty is also falling sharply, and the average income level of low-income groups is also rising sharply. This is one of the important reasons why the reform can gain wide social support and China can maintain social and political stability. Since the mid-1990s, not only the urban poverty has been deteriorating, but also more and more difficulties have been faced in further alleviating rural poverty. If measured by the poverty line of 1 USD per person per day set by the United Nations, the total number of poor people in China will reach about 200 million. Faced with such a huge absolute poverty population, how to alleviate poverty and maintain social stability in the process of rapid economic growth is an unavoidable major issue for China, which is about to enter the 2 1 century. Anti-poverty, especially the elimination of absolute poverty, can not only effectively improve the overall social welfare level, but also effectively maintain social stability. This is because poverty provides the most basic guarantee for the bottom of society, so it will inevitably win his support for the government and at the same time keep them from taking risks. Therefore, for today's China, "anti-poverty" is also the "hard truth".
As we all know, the public is extremely dissatisfied with the current situation of income distribution, which is one of the main triggers of social instability. So, what is the public's dissatisfaction? All kinds of studies agree that public dissatisfaction is not mainly aimed at the result of income distribution, but at the causes of this result. Uneven income distribution caused by illegal income such as corruption and bribery, tax evasion, eating, drinking and having fun with public funds is the most direct and main reason for public dissatisfaction. It can be said that the inequality caused by illegal income is the most harmful to social stability. This shows that it is absolutely necessary to crack down on the "fourth distribution" even if it is only based on the need of "stability". Therefore, "anti-corruption" is also "the last word."
Short-term countermeasures
The short-term goal is to realize the minimum program of welfare society-to establish a safety net. In order to achieve this goal, it is necessary to adopt a "two-pronged" strategy combining financial means and non-financial means. The so-called "financial means" refers to "transfer payment" in the general sense, while "non-financial means" refers to employment policy, industrial policy and regional policy. I think considering the national conditions of China, as a short-term measure to alleviate inequality, non-financial means may be more effective than financial means.
First, seek truth from facts, do what you can, and take "eliminating absolute poverty" and "building a safety net" as the short-term goals.
Paying attention to the uneven distribution of wealth does not mean egalitarianism, nor does it mean narrowing the income distribution gap in the near future. For today's China, the goal of realism is not to narrow the income gap, nor to immediately stop the trend of widening the income gap, but to first strive to eliminate absolute poverty and establish low-standard but high-coverage absolute poverty.
The "safety net" will set a minimum safety line for the society, so that the most unfortunate members of society will not fall into the bottomless abyss. At present, we are unable to create a "welfare state". Beveridge-style welfare guarantee commitment is a distant and unnecessary dream. We can only try our best to provide everyone with the lowest level of social security-"safety net".
Second, establish a unified national labor market, promote the population flow between urban and rural areas and between regions, and curb the further expansion of the urban-rural gap and regional gap.
For decades, we have firmly bound the feet of China people with a set of strict policies and systems, effectively controlled the population flow, and prevented the free mechanism of "man struggles upwards" from playing its due role, thus widening the gap between urban and rural areas and regions. Personally, I think it is unrealistic to narrow the gap between urban and rural areas by increasing investment in rural and underdeveloped areas through central financial transfer payments in the short term. In fact, the most effective way to control the widening income gap between urban and rural areas and regions is to break the barriers of population mobility and "liberate the feet of China people". Regrettably, the current general trend is that major cities begin to set employment thresholds and try their best to keep out foreign laborers, especially those from rural areas. Of course, this approach can alleviate the urgent needs of all localities, but it can't solve the long-term problems of the whole country, and it can only make the problems accumulate more and more serious.
Related to this is the problem of urbanization. On the issue of urban development, we should respect the development of industrial economy and let nature take its course. Let cities of any size develop freely, neither cutting feet and fitting shoes, nor encouraging development. The current problem in China is that there are too few megacities, not too many. Unreasonable policies restricting the development of big cities and megacities should be abolished as soon as possible, and the development of central cities should be fully supported, so as to promote regional economic growth through these "growth poles" and "growth points". Of course, only open urbanization can alleviate the urban-rural gap and regional gap, so I want to emphasize once again the necessity and importance of establishing a unified national labor market.
Third, fully support the development of labor-intensive industries and do everything possible to expand employment opportunities.
Industrialization mode has a direct and important impact on income distribution. Because wage income is more conducive to equal distribution than capital income, adopting labor-intensive industrial growth mode will increase the share of wage income and improve income distribution. In fact, in a country like China, the government's tax collection and management ability is very weak, and the limited fiscal revenue can hardly fall on the heads of vulnerable groups, so the employment policy has become the most effective tool to adjust income distribution.
Fourth, establish a fair social security system to provide all citizens with the lowest level of unified standards of public services.
The government must stop the "icing on the cake" redistribution policy as soon as possible, care for the vulnerable groups, give priority to supporting the poor population, poor areas and rural development, and ensure "timely assistance". In China, backward areas not only have low per capita income, but also have the worst public services. The central government has the obligation to ensure that citizens are provided with the lowest level of basic public services with uniform standards. Basic education and medical care are the most important public services, which can not only improve the quality of life of people in these areas, but also improve the quality of the labor force. Research has proved that human capital investment is the engine of modern economic growth. Only when the labor force in backward areas is healthy and generally educated can these areas hope to enter the mainstream of economic growth. From this point of view, providing everyone with equal opportunities to receive education and medical services through transfer payment should be regarded not only as a charitable act, but also as an investment. This kind of investment is not only beneficial to poor areas, but also to the whole country.
Fifth, support the social and economic development of the central and western regions through financial transfer payments and various preferential policies.
Using transfer payment to improve the infrastructure in poor areas is the first step to provide equal development opportunities for all regions. In China, backward areas are backward because they lack transportation facilities, power supply and water supply facilities and other prerequisites for growth. Due to the lack of necessary infrastructure, backward areas can only be at a disadvantage in the competition with developed areas, so improving infrastructure is a necessary condition for economic development in backward areas. In order to help backward areas develop their economies, we must also strive to attract various economic activities to these areas and promote the flow of production factors to backward areas. Improving infrastructure is a condition for attracting foreign investment, but it is not enough. Foreign capital will not automatically flow to backward areas because of improved infrastructure, because the infrastructure conditions in developed areas are much better. Therefore, in addition to increasing investment in infrastructure in backward areas, the government must also adopt various preferential policies to promote the flow of factors of production in a direction beneficial to backward areas.
Long-term strategy
In the long run, China should vigorously develop non-governmental organizations and build an efficient "safety net" through the effective cooperation of the government, non-governmental organizations, enterprises, families and individuals, that is, by establishing a "welfare society".
The theory of "welfare society" holds that the government should not do everything, but should give full play to the role of non-governmental organizations; The relationship between government and non-governmental organizations is not zero-sum relationship, but equal and cooperative relationship; The government has no ability and no need to undertake all social security responsibilities alone. Social security for all citizens should be shared by the government, NGOs, families and individuals.
In my opinion, this proposition is an extremely important warning and advice for China, a developing country with a profound family security tradition, low government financial capacity, very imperfect modern social security system and a serious shortage of non-governmental organizations.