Narrowing rich-poor gap: A key to China's modernization
(Xinhua)
Updated: 2005-10-10 16:43

Narrowing the divide between the rich and poor is standing as one of the core issues at the fifth plenary of the 16th Central Committee of the Communist Party of China (CPC), which opened Saturday.

The income divide among Chinese citizens has been sharply widened since 2003, and has reached the severe "yellow light" warning level.

Gan Yuping, a member of the Chinese People's Political Consultative Conference (CPPCC) holds that China's modernization must give priority to reform of taxation, social security, and more support for rural areas.

Statistics show that as of July this year, Chinese rural areas had over 26.1 million denizens in absolute poverty, despite the fact that 27 Chinese provinces and municipalities scrapped agriculture taxation in 2005, resulting in 20 billion yuan (US$2.5 billion) of subsidies to agriculture and farmers.

Twenty percent of urban families possess 66.4 percent of the total urban family financial assets. A hearing on personal income taxation was held last month by China's top legislature, the National People's Congress (NPC) Standing Committee, which proposed to increase the tax levying point from 800 yuan (US$100) to 1,500 yuan (US$187.5).

The Chinese government is considering collecting high-consumption taxation and legacy taxation as ways to reduce the rich-poor gap.

Other measures include building a framework for helping poor citizens and measures to help those unemployed.

A report jointly published by the UN and the World Bank shows that China has become a "paradigm" for poverty elimination. Since China adopted the policy of reform and opening to the outside world, the country's per capita GDP has increased by five times.

China saw an 1.5 million annual reduction of the its population living in poverty in the 2001-2004 period.