Distribution of Income.docx

1、Distribution of IncomeDiscussion of Chinas Income Distribution SystemCourse: Economics of the public sectorXiaochen Tu1. Summary1.1 Chinas current system of income distribution The basic economic characteristic of the socialist society is the public ownership of means of production, to do everything

2、, according to work is the ideal model for the distribution of socio-economic system of socialism. However, most of the socialist countries in the world come from poor countries which produce a lower level of productivity, the majority of socialist countries did not take the accumulation of the capi

3、talist production, they did not reach the productivity level of development to meet Marx depicted socialist society, so the model to do everything according to work do not have the social basis for its effective implementation. Since the founding of the distribution system, China embarked on economi

4、c reforms, confirmed that China is still in the primary stage of socialism, establishing a socialist market economy as the basic direction of Chinas economic reform, recognition of national conditions and the background of the reality of diversified economic elements coexist. The 16th CPC National C

5、ongress clearly pointed out that: “to establish the principle of labor, capital, technology, and management of production factors such as distribution according to contribution, improve the distribution according to work as the main distribution system a variety of modes of distribution coexist. Ins

6、ist on giving priority to efficiency with due consideration to fairness, it is necessary to promote the spirit of dedication, earnestly implementing the distribution policy, it is necessary to oppose egalitarianism, but also to prevent the income disparity between the objective of common prosperity,

7、 and expand the proportion of middle-income, improve the income of low-income level.” At the same time to speed up the process of marketization of the national economy, to continue to promote the market of capital, labor, technology, management and other factors of production, promote the factor pri

8、ce formation mechanism. Thus, we can deeply feel the pace and direction of economic reform of distribution system in the construction process of Chinas socialist market economic system, , clear that at this stage, China has established the system that the distribution according to work and the alloc

9、ation of the contribution of the factors of production combine as the distribution system of the current Chinese society. 1.1 Main points of the income distribution systemFirstly, found the guiding ideology of the first money to the common prosperity. Adhere to the socialist road, follow the distrib

10、ution according to work, and its fundamental purpose is to break the iron rice bowl of egalitarianism, make the people to live a prosperous and happy life. On the basis of summing up historical experience, Deng Xiaoping believed that the achievement of this objective can only be a step by step from

11、part to whole, and ultimately achieve common prosperity. Allow some of the people through their own hard work, legitimate business, and give full play to their wisdom to achieve the first rich, it is reasonable to recognize the difference between incomes. It reflects the fair better. Secondly, put t

12、he distribution according to work and distribution according to production factors together. It not only clarified the long-standing unclear controversy in the distribution theory, but also pointed out the direction to further improve the allocation and distribution. In theory, there are two basic f

13、actors determine the size of personal income: first, the physical elements of individuals about capital, land, plant and other factors of production; second human elements, mainly refers to the quality and capacity of individuals. In addition to depending on the genetic and other congenital factors,

14、 to a greater extent it depends on the acquired investment in education and their own efforts. Thirdly, adhere to the principle of fairness and efficiency. That is to say, to improve efficiency is the way that makes part of the region, part of the unit to get rich first. Insist on giving priority to

15、 efficiency is to adhere to the priority of development of productive forces. Adhere to the principle of fairness is to make sure that all the people could enjoy the fruits of development of productive forces and economic growth. This is the fundamental requirement to achieve common prosperity goals

16、. The income level may be variable with economic growth, but we must also make sure that the income and living standards of low income people increase and improve along with economic growth, too. Fourthly, banning illegal income. In Chinas 15th CPC National Congress report, it clearly defined that,

17、strictly ban illegal income, the action of misappropriation of public property, tax evasion and other illegal means to seek profit would be resolutely punished according to law, rectify unreasonable income, the behaviors that use virtue of trade monopolies and certain special conditions to obtain ad

18、ditional personal income must be corrected. 2. The reform process of the principles of income distributionIn the practice of 30 years of Chinese reform and opening-up, the focus on mutual trade-offs between fairness and efficiency of income distribution has never been interrupted, and its reform cha

19、racterized by fairness and efficiency in the different stages of economic development, also attracted by varying degrees of focus. The income distribution reform process has experienced several periods after opening up. The first period (1978-1984):“Overcome the tendency of egalitarianism, in order

20、to improve the economic efficiency”. At the beginning of reform and opening up, the gap between Chinas economy and the worlds developed economies is big, the requirement to improve economic efficiency, and narrow the development gap is very urgent. And therefore decision-makers turned to improve eco

21、nomic efficiency, and made remarkable achievements. Facts have proved that before the reform and opening up the egalitarian distribution greatly inhibit the efficiency of space, but also showed no real sense of fair. This distribution has led to the double loss of equity and efficiency. After the re

22、form and opening up, Chinas top decision-makers realized that economic efficiency is a necessary way of economic and social development. The second period (1984-1992): “Efficiency first, fairness second”. At this stage, the emerging social contradictions asked the Government to provide a degree of a

23、ttention to the fair, community fair appeal should be taken seriously. In the allocation of decision-making, giving priority to efficiency than the fair really solved the problem of short-term, but planted a hidden danger for long-term sustainability of the economic and social. When the development

24、level of economic is low, equitable subordination is conducive to focus on economic development, to improve economic efficiency, but the resulting social distortions would increase the subsequent correction costs. The third period (1993-2006): “giving priority to efficiency with due consideration to

25、 fairness”. In order to meet the needs of economic and social development, in the 14th CPC Central Committee decision on the establishment of a socialist market economic system, it proposed the allocated principle of giving priority to efficiency with due consideration to fairness, and get the full

26、recognition and demonstration in theoretical circles. Indeed, giving priority to efficiency with due consideration to fairness principle provides a premise for the accumulation of social wealth and improving peoples lives. However, because of the principle is focusing on efficiency, the increasingly

27、 serious problem of the uneven distribution of income and a widening wealth gap problem happened in the actual economic life. Since 1994, Chinas Gini coefficient has always been maintained at levels above 014, and there is an increasing trend. The fourth period (2006-now): Initial distribution and r

28、edistribution are necessary to properly handle the relationship of efficiency and equity; in redistribution we should pay more attention to fairness.” According to the views of the community, the Sixteenth CPC Central Committee gave up the formulation of giving priority to efficiency with due consid

29、eration to fairness, stressed the need to pay more attention to social equity on the basis of economic development. Because if we neglected fairness in the initial distribution, to correct the injustice results in the redistribution are worthless. From the current situation, the partys documents onl

30、y proposed to properly handle the efficiency and equity in the initial distribution and redistribution period. About how to understand and solve the combined relationship between fairness and efficiency in the new situation, we still need the theoretical community to make the actual research. 3. The

31、 analysis on national income distribution3.1 The distribution patterns The distribution of national income means the allocation between the various economic entities of a country in economic activity during a given period in broad; the narrow sense refers to the allocation process of the national in

32、come in the national economy, the production units and production units as well as residents. In the case of China, it includes the three processes of the initial distribution, redistribution and final distribution. In this section, we analyze the process of formation at the present stage of nationa

33、l income distribution. In order to in-depth analysis of these reasons, we should take carefully study of the income distribution process. (1) The process of formation in governments final income distribution pattern:The initial distribution of total income of government = increased value by government + l