Social security, employment taxation

In Wen's report, he promised the government would promptly formulate policies and measures to adjust the distribution of national income, and gradually let individual income rise faster than that for government and enterprise employees.

He also stressed the role of fiscal and taxation policies in adjusting the primary and secondary distribution, which would "create conditions for more people to earn property income such as securities gains."

To lawmakers and political advisors who gathered at the annual sessions of the National People's Congress (NPC) and the National Committee of the Chinese People's Political Consultative Conference, more jobs and a stronger social safety net are the top priorities.

"More job opportunities could bring up salaries," said Zhang Quanshou, an NPC deputy and president of a human resources development company in south China.

"When job applicants outnumber vacant positions, you never expect a hefty wage," he said, suggesting the government should promote mid-sized and small businesses which are the largest sources of job creation in China.

Meanwhile, improvements in social security also benefit mid- and low-income families, said Zhao Xiangping, an official with the Department of Human Resources and Social Security in China's central Hunan Province.

Premier Wen pledged in his report that the government will spend a total of 318.5 billion yuan to expand the social security system and raise the level of basic pensions of enterprise retirees by 10 percent, which helped secure living of the mid-and-low income families after retirement.

A sound taxation system is also important for narrowing the income gap. Many lawmakers and political advisors have called for taxation reforms, including lifting the minimum taxable personal income threshold, and imposition of property and estate taxes.

Monopoly industry

Wen has said the government will deepen the reform of income distribution system of monopoly industries, set strict standards for the incomes of executives, especially senior ones, of state-owned enterprises and financial institutions.

Ultra-high incomes at monopoly industries, such as telecommunications, energy and power generation, which widen the income gap and worsen social equality, have long been a source of public complaints.

Zhang Xiaoji, a researcher with the Development Research Center of the State Council, a government think-tank, said it is very important to level the threshold of the monopolistic sectors and allow private business to enter.

Only when different parties share the same chances of competition, income gap between monopolistic sector and other industries can be closed, Zhang said.