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UPDATED: July 19, 2008 NO. 30 JUL. 24, 2008
Can Temporary Living Subsidies for the Poor Help Offset High Inflation?
Netizens worried it would create new social inequality
 
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revenues will be used to support laid-off workers and relieve the poor jobless and low-income groups. In this case, Dongguan's "cash subsidy initiative," though a temporary measure for adjustment, paves the way for redistribution.

Though the exclusion of non-resident migrant workers from the designated recipients of the cash subsidies has stirred up a widespread controversy, it's not the initiative that is the problem. Due to socioeconomic differences in urban and rural areas, China cannot get rid of the hukou system for the time being. In fact, if Dongguan's initiative is followed nationwide, the so-called injustice will be a pointless argument.

The "give cash back" process will provide the poor access to enjoy social benefits and in turn help improve social equality.

Wang Pan (www.china.com.cn): The new inflation relief measure in Dongguan is widely applauded but some may think it to be too temporary, and suggest tax cuts to be a better option. Low-income groups most harshly feel the real impact of economic inflation. To cut taxes may benefit more people, but compared to these "cash subsidies" that directly reach the poor, they would take far more time and money. Also as financial surplus dwindles due to rising costs, further tax cuts may perhaps not be the best solution.

Zhao Yang (Zhujiang Evening News): Cash subsidies in Dongguan are expected to benefit at least 122,000 people in the city, which fully represents a people-oriented governance concept. As it is widely acknowledged, there is no absolute fairness in the world, hence what we can do are step-by-step improvements. A temporary subsidy is at least a better option than giving nothing.

Need long-term solution

Bi Shicheng (China Youth Daily): Most parts of China have implemented an overall basic living guarantee system for low-income groups on the basis of limited financial resources. Despite an increase in government fiscal revenues over the previous years, growing expenditures on improving capital infrastructure and other public welfare projects have slowed down the improvement of the guarantee level. When it is plagued by high inflation, the low allowances from the government cannot assure the poor basic living conditions. Low-income groups have to bear more on their own.

It is necessary to help people and improve living standards for the poor by regularly releasing financial subsidies. For example, pegging local welfare levels to GDP growth, and introducing a floating living allowance calculation system based on changes of income level.

Temporary living subsidies have two inherent problems. On one hand, their release is largely dependent on policymakers' intention and therefore has no institutional guarantees. On the other hand, their effects are short-term in the face of probably prolonged inflation. That's the reason why we need to devise a more stable welfare system to benefit the poor in the long term.

Zhang Yongqi (Xi'an Evening News): Dongguan's initiative shows that the awareness of people-oriented governance is on the rise in China. The problem is that, these cash subsidies cannot resolve all public needs regarding redistribution of wealth. In a manufacturing city like Dongguan, where the huge population of migrant workers contributes a large part of local economic growth, non-discriminatory subsidies are necessary.

Although public welfare and people's livelihood prioritize state expenses, temporary policies are not that equally reliable as a rule. It takes much work to establish a diversified relief system and to ensure people at all levels benefit, such as floating incomes with the consumer price level, linking pricing levels with GDP growth and launching tax rebates.

Xin Mu (www.china.com.cn): The root cause for poverty sometimes is that

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