The authorities are making the correct decision to increase
people's income, says a signed article in Shanghai Securities
News. An excerpt follows:
The Ministry of Labor and Social Security is launching a
five-point program to raise employee income. It has been welcomed
by many though there are worries that the salary increase would
weaken China's international competitiveness.
The worry is unnecessary. Workers' salaries should retain a
proper ratio with economic growth. The economy will be hurt by
increased labor costs if the ratio is too high while consumption
will suffer if salaries are too low.
Salaries in China have been relatively low for a long time.
A recent figure from the International Labor Organization
indicated that per capita output in China grew 63.4 percent between
2000 and 2005, but salaries did not have comparable growth. This is
believed to be the cause of the long-term sluggish consumption.
A World Bank report reached the same conclusion in February,
saying that low consumption was the result of low salaries rather
than the high savings rate of Chinese families.
A fact verifying this conclusion is that domestic consumption
has remained at a relatively low level despite continuous State
efforts since the 1990s to stimulate consumption.
The primary issue to address now should be the weak consumption
caused by salaries lagging far behind economic growth.
With the economy maintaining its high-speed growth for more than
two decades, it is time for the Chinese people to share the fruits
of economic prosperity.
(China Daily May 25, 2007)