Many observers noticed signals that the Chinese government would place more emphasis on boosting people’s wages than facilitating economic growth when China’s 18th Communist Party Congress opened last week. The meeting marks China’s once-in-a-decade generational leadership succession.

 In his report at the Congress, which was meant to wrap up the last decade’s losses and gains and be a blueprint for the next decade, Hu Jintao, China’s incumbent president and the Communist Party general secretary, set a goal for the next government to double per capita wages as well as the GDP of the country between 2010 and 2020.

Cai Fang, a director of the Institute of Population and Labour Economics at the Chinese Academy of Social Sciences, believes Beijing will tolerate slower economic growth and focus more on boosting residents’ income.

In the past 10 years, China's annual economic growth has soared to an average of 10 percent. Beijing has set the growth target for 2012 at 7.5 percent, the first time it's been set below 8 percent in eight years.

In recent months, China experienced slow economic expansion. Its GDP growth slowed to a 14-quarter low of 7.4 percent at the end of September.

Cai believes one important factor accounting for the slower growth rate is the aging population and the shrinking labor force.

But Cai points out that a slower growth would be more sustainable for China now after years of aggressive economic expansion pushed up inflation, caused excessive capacity and triggered asset bubbles.

In the report, Hu said the government should strive to close the gap of income distribution, so that the fast, yet sound, economic development can benefit the entire population. He mentioned “income distribution fairness” more than 20 times in the report, which impressed a lot of representatives attending the Congress.

Since it embraced a policy of “reform and opening up” 30 years ago, China has enjoyed rapid economic growth, and now it is the second largest economy in the world. Many problems arose along the way, though. The most heavily criticized is unfair income distribution.

Professor Zhao Zhenhua told Phoenix News that one symptom of the unfairness is the high income of state-owned enterprises and monopolies’ employees.

“The emphasis on fairness of the income distribution shows the government’s resolute to not only making the cake bigger, but also distributing the cake in a fairer manner, ” said Li Jun, one representative of the Congress.

 

Reach the Staff Reporter Zhao Chen here.