Chongqing pledges to shrink the wealth gap

PUBLISHED : Wednesday, 23 February, 2011, 12:00am
UPDATED : Wednesday, 23 February, 2011, 12:00am

State media have for the first time applauded the example set by Chongqing in reducing its wealth gap and pursuing common prosperity, policies championed by its ambitious party boss, Bo Xilai.

An article carried by the official Xinhua News Agency said the southwestern municipality was the first regional government to clearly stipulate that closing the income gap would be a key mission during the 12th five-year plan.

Chongqing has pledged to restructure its income distribution system and slash its Gini coefficient from 0.42 to 0.35 by 2015.

The Gini coefficient, a measure of income inequality, gets closer to perfect equality as it approaches zero.

Yang Qingyu, the top planning official in Chongqing, was quoted by Xinhua as saying it would strive to boost the average income for an urban resident to 31,000 yuan (HK$36,674) a year by 2015 and the average income of a rural resident to 10,000 yuan, lowering the wealth gap to 2.5:1. Apart from helping residents to buy flats at reasonable prices, narrowing income disparities is another key element of the so-called Chongqing model of development.

This is in sharp contrast to other regional governments, which are still pursuing high economic growth rates rather than focusing on levels of happiness and satisfaction.

Professor Joseph Cheng Yu-shek, a political scientist at City University, said it was wise for Bo to roll out the policy at this time. 'Obviously, the issues of social justice and the widening gap between the rich and the poor ... are serious concerns of the party's top leadership,' he said.

'Bo's idea of setting a target for narrowing the income disparity is a very attractive policy proposal, which certainly will gain a lot of popularity.

'As a local government leader, he wants to present himself as a very innovative and responsible leader, instead of competing with other municipalities such as Beijing and Shanghai for advancement in terms of economic development.'

The Xinhua article seems to be a new endorsement for Bo and the policy he is championing in Chongqing, after visits to Chongqing by three high-ranking Communist Party leaders - Vice-President Xi Jinping, propaganda chief Li Changchun and top law enforcement official Zhou Yongkang - since the middle of last year.

And that could be regarded as a signal that Bo is edging closer to a spot on the party's top decision-making body, the Politburo Standing Committee, which is due to be restructured in autumn next year.

But a leading economist said it would not be easy for Chongqing to achieve its goals within five years.

'It will be very difficult for Bo to close the wealth gap to such a remarkable extent in his term without drastic changes to the basis of the political system,' said Yi Xianrong, an economist at the Chinese Academy of Social Sciences.

But Cheng said it did not matter whether Bo would leave his Chongqing post or accomplish his ambitious goal before 2015, because the immediate task was to earn a good reputation for running the city and pave the way for further promotion.

'Unlike Xi Jinping, Li Keqiang and Li Yuanchao, Bo, as one of the contenders still struggling at the margin, has spared no efforts in securing a place in the next Politburo Standing Committee since taking office in Chongqing,' Cheng said.