Further reforms for a more rational income distribution pattern

CHANG Xinghua and LI Wie

Research Institute for Social Development, National Development and Reform Commission (NDRC)

Abstract:

Since the 1990s, tremendous changes have taken place in China’s national income distribution pattern. As indicated by our calculation results, in primary distribution, enterprises’ income has grown at the highest rate, followed by government revenue and finally residential income; during re-distribution, governments’ share has risen markedly due to the rapid increase in various types of extra-system income and land revenue, while enterprises have been in a relatively inferior position and residential income has continued to decline. The characteristics of intra-sector distribution are: disequilibrium in the government sector in revenues and expenditures between the central and local governments, and a rapid increase in local governments’ non-budget revenue; in the enterprise sector, profits of monopolized industries have grown more rapidly than competitive industries and profits have been concentrated in a few industries; in the residential sector, residents’ share of labor remuneration has declined and will continue to for a long period, while the income gap within the residential sector is widening. Considering these problems, we should make appropriate adjustments, balance distribution among the three sectors and effectively combine adjustment of the national income distribution pattern with adjustment of the intra-sector distribution pattern.

Key Words: National income distribution pattern, intra-sector distribution pattern

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