Ease burden on small companies

(China Daily)
Updated: 2010-08-04 15:27
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Editor's note: Experts say that in order to help boost the earnings of people in the medium- and low-income brackets, measures must be taken to assist the development of China's small- and medium-sized enterprises (SMEs), primarily by easing the tax burden on the nation's SMEs.

Ease burden on small companies

Zuo Xiaolei, chief economist of China Galaxy Securities

China should change the inequitable income distribution system. We should shift from the current investment-led economic growth model to a consumption-led one. First, China should cut taxes for small- and medium-sized enterprises to speed up their development, create more job opportunities and increase wage levels. Second, State-owned enterprises should hand over more of their profits to the government. Third, monopoly industries should be opened to the private sector, and China should provide fair opportunities to different interest groups so that the income of monopoly industries can be distributed fairly.


Chi Fulin, president of the China Institute for Reform and Development

Ease burden on small companies

The inequitable income distribution system has worsened in today's China. In the past 30 years, China has focused on gross domestic product to solve the shortage of goods, but now the nation's economy has entered a new age, so China should begin to focus on fairness of the income distribution system to make its development durable. China's central government should reform the income distribution system to solve the two most important problems, one is to narrow the huge income gap between the rich and poor, another is to increase the income of middle- and low-income people to boost the consumer market.

Ye Tan, economic columnist

China should double middle- and low-income people's incomes to stimulate consumption and enlarge the size of the middle class. The shortage of migrant workers has proven that China's old economic development mode is not sustainable. China must change the current inequitable income distribution system to ensure middle- and low-income people are better off. The government should limit the power of monopoly enterprises, cut taxes for small- and medium-sized enterprises, build a comprehensive social security system and prevent inflation.

Tang Jun, secretary-general of the Social Policy Research Center at the Chinese Academy of Social Sciences

China's government can use two measures to encourage enterprises to increase employees' incomes. One measure is to cut the taxes of small- and medium-sized enterprises, the more employees an enterprise has, the greater its tax cut. Another measure is to request enterprises pay social security fees for employees depending on the company's profits, the higher a company's profit the more social security fees it must pay on behalf of its employees.

Ease burden on small companies

Li Yining, honorary dean of Guanghua School of Management at Peking University

Workers' incomes count for less and less in terms of the overall national income, so China should enhance government's role in income distribution and lead the development of the charity sector. China should increase the lowest wage standard, farm produce prices, and develop modern industrial agriculture. The government should do more to tackle poverty, cut taxes for middle- and low-income families, and increase the rates of new taxes such as death duties and inheritance tax.