New China plan to fight rich-poor gap

DISCONTENT: Protesters hold a banner during a small ‘Jasmine Revolution’ protest outside the Chinese liaison office in Hong Kong yesterday. Picture: REUTERS

China emphasise raising living standards in new development plan.

FOREIGN STAFF

Published: 2011/03/07 07:06:36 AM

CHINA’s leadership emphasised raising living standards in its new development plan as inflation and rising home prices stoke discontent, a leading figure on reform in the country said yesterday.




The plan from 2011-15 was designed to improve the living conditions and livelihoods of Chinese citizens, Zhang Ping, chairman of the National Development and Reform Commission, said in Beijing. China’s previous five-year plan, during which the economy more than doubled in size, focused more on the pace of expansion, he said.


Premier Wen Jiabao on Saturday said in his annual state of the nation address that curbing inflation would be the top priority for macroeconomic control efforts this year and also pledged to narrow the gap between rich and poor "as soon as possible".


China is keeping a wary eye on the unrest in North Africa and the Middle East and clamping down on protests. Hundreds of police were deployed in Shanghai and Beijing in the past two weeks after calls were made on the internet for people to join the "Jasmine revolution" protests.


The divide in China between rich and poor is at levels not seen outside Africa, Credit Suisse analysts said in August.


"The previous speed-oriented economic growth model has led to a higher reliance on imported energy and huge environmental losses," said Lu Zhengwei, a Shanghai-based economist at Industrial Bank. "The widening wealth gap between the rich and the poor in China is threatening social stability."




The nation’s Gini coefficient, an income-distribution gauge used by economists, has climbed to near 0,5 from less than 0,3 a quarter-century ago, according to Li Shi, professor of economics, School of Economics and Business at Beijing Normal University. The measure ranges from 0 to 1, and the 0,4 mark is used as a predictor by analysts for social unrest.


"We wish through efforts during the 12th Five-Year Plan, we could narrow the income distribution gap and help the people’s income grow relatively fast," Mr Zhang said.




Growing domestic demand is also a key part of the strategic plan, he said . Tackling inflation and ensuring adequate supplies of food is a near-term target .


Consumer prices rose an annual 4,9% in January and food prices jumped, even after the central bank raised interest rates and reserve requirements . Bloomberg