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Equal distribution of resources needed

(China Daily)
Updated: 2010-01-15 07:53

To boost domestic demand in order to fully recover from the global financial crisis we have to distribute social wealth equally. And one essential measure for that should be progressive tax rates and accelerated urbanization, says an article in the Overseas Edition of People's Daily. Excerpts:

The government has taken many measures to revive the economy since the outbreak of the global financial crisis. And though they have borne results, we have to take more appropriate long-term stimulus measures.

There are two objectives for stimulating the economy: limiting production and boosting domestic demand. The latter however, can be a long-term support for economic development.

Therefore, the government's urgent task should be to help raise the income of the poor. This can be done in two ways.

First, the government has to narrow the widening income gap with a progressive taxation system. It can increase people's consumption power by taking more money from the wealthy and spending it on social welfare and infrastructure construction.

Second, the government should expedite the urbanization drive. The divide between urban and rural people is the main reason for the widening income gap. In fact, farmers' low income causes most of the surplus in production. Only by raising rural people's economic status can this problem be solved.

The section of the population that deserves special attention is migrant workers. They live in cities but earn only paltry amounts, when their income makes up the most essential part of the entire rural population's.

So if the government adopted the two proposed measures they would benefit them and help increase domestic demand and boost economic growth.

(China Daily 01/15/2010 page9)