Wu Guangqiang

    GOOD news! According to the Ministry of Finance, China’s fiscal revenue reached 7.08 trillion yuan (US$1.06 billion) in the first 10 months of this year, up 21.5 percent from the same period last year, an increase rate of nearly two times that of GDP in the first three quarters.

    Of the total fiscal revenue, tax income accounts for 6.28 trillion yuan, up 22.6 percent from last year.

    Such a sharp surge in income would make any other country green with envy amid the sluggish global economy. The supposedly good news, however, would hardly hearten the population in dread of inflation. The latest CPI, which has been hitting new highs on end, has ruthlessly highlighted a fact — an embarrassing and ironical one — that the government’s purse is bulging quickly while the average resident’s purchasing power is shrinking.

    The Chinese Government has good reason to be proud of its achievement: Revenue has been increasing at a breathtaking rate over the past years. It registered an 11.7 percent increase even in the worst year of 2009. At the current rate, by the end of this year, the annual income will be well over 8 trillion yuan, making China the second-largest fiscal earner in the world. With bulging coffers, the country has been able to stage spectacular games and expositions, build the world’s largest high-speed railway networks and put up grandiose government office buildings in every corner of the country.

    There is, however, a gloomy picture. A report on China’s economy released by the World Bank shows that between 2001 and 2009, while China enjoyed a 10 percent annual economic increase, the poorest 10 percent of the population saw a 2.4 percent decrease in their incomes. During the 1995-2007 period, adjusted for inflation, government revenue increased 5.7 fold while the per-capita disposable income of urban residents grew only 1.4 times. And, net income of rural residents was only a third of their urban counterparts. Rising prices for a variety of items, ranging from homes to vegetables, have kept many from even thinking about buying meat. Shenzhen residents are flocking to Hong Kong to buy cheaper daily necessities. Just one year ago, it was Hong Kong people rushing to Shenzhen to do the same thing.

    Apparently, something is wrong with the distribution of national wealth. Administrative expenditure now accounts for 20 percent of the government’s entire revenue, twice that of America’s and 10 times that of Japan’s. In contrast, expenditure on health care, education, social security and employment is only 14.9 percent of the total, against America’s 61 percent. A nation with a wealthy government and a hard-up population is not a blessing. National expectations are that the people should enjoy — and are entitled to — a larger share of the wealth cake.

    To correct this prolonged imbalance calls for overall and profound reforms in many respects including economic structure, fiscal policy, social security and oversight of expenditure. Priority must be given to substantial improvement of the people’s livelihood rather than to massive and inefficient public projects.

    Much can be done about that: cutting taxes such as personal income tax, which has remained unchanged despite the spiking inflation, increasing incomes for the working class, the lower income group in particular. Most importantly, a people-oriented philosophy should be a permanent State policy rather than a temporary expedient.

    One more penny in the pocket of the needy is better than one spent on the vanity of “face works.”

    (The author is an English tutor and a freelance writer.)