Opinion / Liu Shinan
Achieve both efficiency and fairness
By Liu Shinan (China Daily)
Updated: 2006-02-15 06:38
The government has eventually admitted that the wealth disparity between
China's rich and poor populations has reached an unreasonably large
extent.
Talk about unfair distribution of income has been prevalent in recent
years but the official acknowledgement by the most authoritative central
government department has been rare and thus is phenomenal.
The National Development and Reform Commission early last week released a
report stating that the Gini coefficient, an international measure for
income inequality within a given population, had reached 0.4 in China,
"the upper limit of the index's reasonable value range."
The news has triggered ardent debates. Arguments centre around the
relationship between efficiency and fairness during China's economic
reform. They mainly fall into two categories. While both acknowledge the
seriousness of the problem, one side argues inequality is unavoidable if
efficiency is to be achieved; the other side emphasizes that now it is
time to place fairness above efficiency.
I think both sides are wrong in pitting efficiency and fairness against
each other. Efficiency and fairness are not intrinsically opposite to
each other. They can co-exist if their relationship is properly handled.
Fairness in income distribution does not mean egalitarianism. Lowering
the income of the rich population is not the right way to narrow the gap.
In fact, the huge gap of income disparity in China is not the outcome of
the efficiency-oriented economic reform but rather the result of illegal
means taken by some rich people in their avaricious moves to grab social
wealth.
Most of the richest people in China used irregular methods to accomplish
the primitive accumulation of their personal wealth. "Accumulation" is
perhaps not the right word to describe the growth of their wealth as it
usually connotes a gradual process. "Rocketing" is probably more
accurate, because many of them hit their gold mine nearly overnight.
The most illustrative examples happened in the "reform of State-owned
enterprises." People with official backgrounds turned State-owned
property into their private property at very low cost (or even at zero
cost in some cases) while the workers who had been "masters of the
country" under socialism were deprived of their say during the process.
There were other forms of robbery of State-owned property in the name of
"exercising market economy." For instance, the profits of China's real
estate industry are notoriously high but the developers' franchise of
land was usually clinched at unbelievably low prices.
Many private entrepreneurs accumulated their wealth by paying very low
wages to labourers and forcing them to work overtime.
This unethical behaviour should not be regarded as normal in a market
economy. In fact, developed capitalist countries have their laws to crack
down on unfair competition and management irregularities.
After having experienced more than 20 years of reform, the majority of
Chinese people now do not resent income inequality. What they complain
about is the unequal opportunity caused by illegal means or crimes.
Narrowing the gap between the rich and the poor is certainly an important
move in "building a harmonious society," but what is most urgent is not
artificially lowering the income of the rich population. Instead,
effective moves should be taken to crack down on all economic crimes. And
those who have gathered a huge amount of wealth in a very short time
should be held accountable for the source of their income. The government
should take a serious attitude in this regard.
Email: liushinan@chinadaily.com.cn
(China Daily 02/15/2006 page4)
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