Research Of Distribution System In China Based On Income Difference Between Industries

With the rapid development of China's economy in recent years, the living standard of people has been improved substantially and comprehensive capability of our country has been strengthened remarkably. New leadership of the Communist Party of China (CPC) put forward clearly, Chinese government must attach more importance to people's livelihood, and propel comprehensive, balanced and sustainable development economically and socially. Socialist harmonious society has become the goal that all people struggle for. However, in the process of rapid development of China's economy, there exists great difference between city and country, among areas, esp. a growing gap in industry income. Obviously, the trend is harmful to the construction of harmonious society. Leadership of CPC has been well aware of the fact that the widening income gap would give rise to more serious wealth polarization. Chinese government would continue to deepen reform of the income distribution system and increase the income of urban and rural residents has been formulated in the report to the Seventeenth National Congress of the Communist Party of China. Equitable income distribution is an important indication of social equity. A proper balance will be struck between efficiency and equity in both primary distribution and redistribution , with particular emphasis on equity in redistribution. The idea change will bring us a major breakthrough in the income distribution system and theory.The thesis chooses an analytic angle of income disparity between monopolistic industries and non-monopolistic ones, firstly analysis the root cause of income gap of inter-industries. The most important reason for income difference of industries is industry monopoly. The employees in monopolistic industry can get the income of several times or even dozens times that of non-monopolistic industry, because that these monopoly industries, taking advantage of their monopolistic position, seize enormous monopolistic profit, which can be easily transform to personal income of these industries. The major form of industry monopoly in China is administrative monopoly, which is based on historical inertia and planned economical system.Monopolistic industries have caused the great deadweight losses of social welfare and lack of efficiency or even inefficiency in economy. The negative externalities created by monopoly industries are analyzed economically and socially in the thesis, which is attempted to formulate that China's monopolistic industries must be regulated and governed. The monopoly produces great effect of income distribution, distorts national income distribution, and widens the income gap existed long. To narrow the disparity of national income, Chinese government presently should determine to renovate monopolistic industries. The distribution relationship between state and enterprises should be regulated, government functions should be transformed as soon as possible, cut apron strings between governments and enterprises. Chinese government should quicken reforms of property right of state-owned enterprise, introduce competitive mechanism by breaking industry monopoly and fostering new competitive entity, and clamp down on illegal income monopolistic industries get through their monopoly position. Some abuses in distribution mechanism should be wiped away to perfect income distribution system of our country.In my opinion, to contain wealth polarization and narrow income disparity, Chinese government should advocate the third distribution of national income, bring into full play the public good causes such as charity activities of enterprise and individual in the process of regulating wealth polarization and bridging social crack, besides all levels of governments concerning weak groups such as off-job workers, the old, the lonely, the weak and the disabled, trying all kinds of ways to quicken the rate of income increase of these weak groups, paying attention to the value of equity in primary distribution . Chinese enterprises lack the charity idea and the consciousness of social responsibility. They do not take part in actively public good causes. Monopolistic industries little return to society, even if they benefit considerably from administrative power and policy support. Consequently, Chinese government should advocate enterprise to build the idea of Corporate Citizenship, strengthen the consciousness of social responsibility, and make the related law and tax policy, which encourage enterprises and individuals to participate in charity activities and bring the third distribution into full play.