The central government has pledged that all retirees from State-owned enterprises will receive an increase in pensions by the end of the month - a move to narrow the widening income gap.

Senior technology professionals and those that receive a relatively low pension will get an increase of 120 yuan ($15.80) and others, 80 yuan, according to the Ministry of Labour and Social Security.

A document posted on the ministry's website yesterday said the raise would affect about 42 million retirees and cost about 40 billion yuan.

It said the central government would offer special subsidies to the country's central and western regions, as well as the Xinjiang Uygur Autonomous Region in the northwest. But it also required local governments to increase their financial input.

The decision to raise pensions for enterprise retirees over the next three years was made last week at a State Council meeting chaired by Premier Wen Jiabao.

A document released after the meeting said the government had already raised their pensions in the past three years by an average of 8 percent a year, but the present pension level was "still quite low".

To further ease social tensions caused by the income gap, the government has decided that the increases over the next three years would exceed the rises made between 2005 and 2007, the document said.

Liu Yongfu, vice-minister of labour and social security, has ordered local authorities to fully implement the policies of the central government.

"The new pensions must be paid by the end of the month," he said at a meeting on Monday.

Investigations show that the average pension of enterprise employees is about 750 yuan per month - the minimum salary set for developed cities, including Beijing.

"With my pension, I can just about make ends meet. Consumer prices have kept on rising in the first half of this year," a 71-year-old retiree Li Xiuying said.

Zhu Deming, another 56-year-old retiree, complained the increase in his pension in the past three years was less than that given to civil servants or those retired from public institutions.

"But I'm happy the government is addressing the problem," he said.

The State Council last week also endorsed a plan to provide affordable housing to urban low-income groups by 2010.

"With the country's economic boom, it's time to share the pie with all levels of society," Chen Liangwen, an economics researcher with Peking University, said.

China Daily

(China Daily 08/08/2007 page3)