Narrowing income gap

Wen said that income distribution had a direct bearing on social justice and stability and ensuring fair income distribution was an important task for the government in the next five years.

"We will ensure people's incomes keep pace with economic growth and their salaries keep pace with increased productivity."

Wen said the government had been working to establish a social security system that would address concerns about pensions, medical services, employment and living allowances, and aim to reduce the income gap and let more people enjoy the fruits of economic growth.

"However, we still have a long way to go," said Wen.

He said the government would narrow the income gap by increasing the salaries of low-income groups and the minimum living allowances and containing salaries in industries with higher incomes.

"We will roll out measures in all these aspects, including tax policies, to make China a country of equality and justice where each citizen lives with the security net," said Wen.

In response to questions about whether the government would raise the threshold of personal income tax, Wen said the State Council, the Cabinet, would discuss proposals to do so on Wednesday.

He said the plan, which would be delivered to the National People's Congress for review, would benefit China's medium and low-income groups.

The government last raised the threshold for individual income tax from 1,600 yuan to 2,000 yuan in March 2008.

Universal health coverage

The government will increase spending in the medical insurance system to make medical services accessible to every citizen, said Wen.

He said China would boost government subsidies this year for insurance premiums to 200 yuan per person, and inpatient medical fee reimbursement rates for urban residents and farmers will be lifted to 70 percent.

The government would work on policies to ensure patients were reimbursed for special medical programs such as renal dialysis, he said.

More than 1.2 billion Chinese are covered by the country's medical insurance system. More than 90 percent of rural population and 89 percent of urban people are covered by government-sponsored health insurance.

In two years, government subsidies for insurance premiums for rural people would be raised to 300 yuan per person and 80 to 90 percent of their medical fees would be reimbursed, said Wen.

If the maximum reimbursement for rural patients reached 80,000 yuan or 100,000 yuan, most serious illnesses would be covered, but separate policies were still needed to cover illnesses such as cancer, he said.

"We will never allow lack of money to keep any citizen from being treated," said Wen.

Wen also revealed measures to narrow the income and pension gap between retirees from companies and government departments.

Retirees from government departments and institutions have long enjoyed better treatment than those retiring from businesses, giving rise to discontent among the latter.

The government would continue to raise incomes and pensions for retired company employees, especially those with higher education degrees, and order enterprises that practiced the yearly-salary mechanism to set aside a certain portion as incomes for retirees, Wen said.