Five-year plan seeks to reduce income disparity

A major new target in the Five-Year Plan for Economic and Social Development that China just unveiled is to boost the growth rate of household disposable income so that it equals the growth rate of the country’s GDP.
Over the past 10 years China’s household income grew at a slower rate than GDP, said Fan Gang, professor of economics at Beijing University and the Chinese Academy of Social Sciences.
Lagging household income has held back private consumption. It has also driven up corporate savings because firms’ earnings are growing faster than household income. That, in turn, may cause higher investment or asset bubbles, as businesses seek to reinvest their savings somewhere. It has also led to a growing income disparity.
In an article in the Gulf Times, Fan said economic growth is still the best social welfare program. "Continued growth and job creation is the only real solution for lifting hundreds of millions of Chinese out of poverty permanently."