A CHINESE official responsible for price control at the National Development and Reform Commission said Sunday that the consumer price index (CPI) was not likely to rise to 5 percent in December.
Zhou Wangjun, deputy director of the price department, told CCTV that he believed the CPI in December would be lower than in November.
He said it was somewhat justified that some international investment banks had raised the cap of China s price control to 4 percent for next year.
The expected moderated price hikes in December compared with November, he explained, was a result of the weakening carryover effect, which referred to the impact of the price hikes in the previous period.
Zhou did not think a vegetable price cap set by local governments was a good method. He believed more incentives should be given to farmers. He warned that economic and legal tools should be prioritized to curb soaring prices, while a more cautious attitude should be adopted when considering any administrative measures.
He urged the establishment of a mechanism to raise wages to help workers cope with inflation. The growth of subsidies for the low-income group should outpace any increase in prices.
Separately, senior researchers had also proposed steps to reform income distribution at the country s 12th Five-Year Plan (2011-2015) to increase incomes and narrow the nation s widening wealth gap, China Daily reported yesterday.
Su Hainan, an expert from the Ministry of Human Resources and Social Security, was quoted by the newspaper as saying that incomes as included in the GDP should be increased by 4 to 5 percentage points in the next five years.
While China s GDP growth skyrocketed in double digits over the past two decades, incomes as a proportion of the national GDP had been falling.
Income accounted for 53.4 percent of GDP in 1990, while the figure fell to 39.7 percent in 2007, according to data from China Society of Economic Reform.
China must first raise incomes, instead of expanding the size of the economy, to keep the world s second-largest economy from faltering, the newspaper also quoted Chi Fulin, director of the China Institute for Reform and Development based in Haikou, capital of Hainan Province. The annual growth rate of incomes should not be lower than 8 percent in the next five years, to be in step with the GDP growth rate, he said.
China has one of the greatest wealth disparities in the world, with the richest 10 percent earning 65 times the average income of the poorest 10 percent, according to a study sponsored by Credit Suisse. A survey conducted by the Ministry of Finance in 2009 also found that the richest 10 percent of families own 45 percent of the total wealth of all urban residents.
Su said the income ratio between urban and rural residents reached 3.3:1, and it needed to be 3:1 in the next five years, while the income ratio between richest and poorest industries had risen to 15:1, and should be capped at 8:1.
The income of senior staff members in State-owned enterprises (SOEs) was 128 times higher than the national average, he said.
(SD-Agencies)
