SPENDING MORE: The sales promotion in a shopping center in Yinchuan, capital of the Ningxia Hui Autonomous Region, attracted many women customers on this year's International Women's Day (March 8). Some government policies boosted the spending of the low-income group through subsidies (WANG PENG)

Income distribution has become one of the people's main concerns in China where more than 30 years of reform and opening up has also resulted in an ever-expanding wealth gap. But narrowing down the rich-poor disparity will prove to be no easy task. Wei Zhong, a researcher with the Institute of Economics under the Chinese Academy of Social Sciences, elaborated on the origins and trends of China's widening income gap, and discussed solutions to curb the gap, in a recent article. Edited excerpts follow:

The problems with China's income distribution should not be simply described as one that has evolved from equalitarian practices before the 1980s to a widening income gap today.

While talking about income distribution inequality, we have to know the different connotations of equality and fairness. By "equality" we describe a situation; by "fairness" we make a judgment. While the pursuit of fairness everywhere in social life and economic activities will ultimately make equality possible, extreme equality will allow equalitarianism to prevail and is therefore detrimental to fairness.

Why the gap?

China practiced equalitarianism for decades in a planned economy that didn't guarantee general fairness of income distribution. The practice, instead, created a number of problems that continue to affect distribution today, including the urban-rural income gap caused by price scissors, which is the discrepancy in the exchange of industrial products for agricultural products, and by restrictions on the migration of the rural population. Another problem is a real income gap much bigger than that measured only in cash--urban bread earners were paid not only by cash but also by materials such as daily necessities. In addition, the people in China's planned economy enjoyed relative equalitarianism with the same employer and similar positions, but an income gap did exist between different work units and different positions.

Since the introduction of the reform and opening-up policy, the widening income gap has become a basic feature of China's income distribution. According to the estimate of the World Bank, China's Gini coefficient (an important measurement of inequality) was 0.3 in 1982. The Institute of Economics under the Chinese Academy of Social Sciences estimated that it increased to 0.454 in 2002.

But the income gap didn't expand at all phases of the 30-year reform and opening up, and a widening income gap is not always a bad thing. The rural reform in the early 1980s helped narrow down the urban-rural gap from 3:1 at the beginning of the reform to 2:1 in 1985, while the wealth disparities between different regions diminished in the 1980s as well, only to expand in the 1990s. Incentives including preferential taxes and land uses introduced during the early phase of the reform created an acceptable income gap while allowing the economy to take off.

But as the income disparities keep expanding and urban-rural and interregional labor migrations become more frequent, the Chinese people will not be able to turn a blind eye to the apparent wealth gaps between neighbors, former classmates, regions, and prosperous cities and remote dilapidated villages.