China unveiled reforms to its income distribution mechanism that included boosting minimum wages and social welfare funds in order to bridge the wealth gap.
The plan approved by the Cabinet calls for increasing the minimum wages to 40 percent of average salaries and lifting the percentage of profit contribution by state-owned companies' to the treasury by 5 percentage points by 2015.
The cabinet also plans to push ahead with loosening controls on interest rates, a move which is likely to lift the interest income of savers.
The measures are expected to reduce the number of people living below the poverty line by about 80 million by 2015.
"Deepening the income distribution reform is a systematic project that is arduous and complicated and concerns the reallocation of various interests," the cabinet said. "There is no way to accomplish it overnight."
Data from the National Bureau of Statistics showed that the country's Gini coefficient, a measure of income disparity, came in at 0.474 in 2012 - well above the 0.40 level considered as threshold for potential social unrest.
The guideline also provide framework to increase income of farmers. It covers protection of farmers' interest by guaranteeing more from their sale of land for development projects. Further, it offers directions on policy areas such as taxation, household registration, social security, etc.
by RTT Staff Writer
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