Opinion | Chinese people want equal opportunities, not equal income

Will income distribution reform finally be launched in China? Reports said the blueprint - already eight years in the making - will be unveiled this month after repeated delays. What's in it is a matter of great public concern.

Income distribution is not only a major economic problem in today's China, but it's also an emotive political issue that touches on social justice. It's an issue that a government that has pledged to improve people's livelihoods and build a harmonious society must tackle.

How can reforms be effective? First, their focus should be on what economists call primary distribution - that is, the distribution of income through the market - rather than on secondary distribution, through taxes and transfers. Second, a more balanced model of economic growth that discourages the formation of vested interests is critical. Third, the government must deepen market reform and have something to show for its political structural reforms.

Income is generally categorised as salary income, property (asset) income, and transfer payment. The government has focused on adjusting the distribution of salary and transfer payment.

Since the 17th party congress, the government has made it a goal to raise the income of those at the bottom, expand the middle, and cap the rapacious income growth of those at the top. To this end, it has scrapped agricultural taxes and built a safety net for rural residents, among other measures.

But these have not been effective. An award-winning research study has found that reforms targeting secondary distribution, such as in income taxes and agricultural taxes, have done little to narrow the income gap. That's because every such effort was easily countered by the widening salary gap in different industries, and the growing wealth in powerful and monopolistic interests. In fact, monopolistic practices account for a third of the wealth gap between different industries.

We are not all equally talented or hard working. Most people accept that, in a market economy based on a division of labour, our income will be different for this reason. What's not acceptable are the institutional loopholes that keep the income gap wide: the lack of a level playing field; monopolies that abuse their power to earn huge profits; the growth of state-backed monopolies, which creates massive "grey income"; and unfair rules that allow the expropriation of people's assets and properties, so that farmers, for one, are continuously denied the benefits of the development of their land. These systemic flaws stoke public anger. People are not asking for equal remuneration; they want equal opportunities.