China needs to take measures to close the widening gap between the rich and poor, members of the country's top advisory body said during a four-day conference, which ended on Friday in Beijing.

According to a survey of about 110 provincial level officials, the yawning income discrepancy topped a list of serious problems in China in 2004, and a reform of the income distribution system is a major concern this year.

"China's Gini coefficient - an internationally accepted measurement of income equality - was estimated at 0.47 this year," Peng Zhao, a member of the Chinese People's Political Consultative Conference (CPPCC) Standing Committee, said at Friday's plenary session.

On the Gini scale, zero corresponds to complete equality and one refers to perfect inequality, or one person having all the income. The "alarm level" stands at 0.4.

China has been trying to find a balance between efficiency and equality in income distribution.

As the country's economy took off, however, priority was given to efficiency, and a huge number of farmers and urban labourers at the lower rungs of the social ladder could live only from paycheck to paycheck.

"Even in the relatively developed Pearl River Delta in South China's Guangdong Province, a migrant worker earns only around 700 yuan (US$85) per month," said Wang Hengfeng, another CPPCC Standing Committee member.

"It is of great importance to promote fairness in income distribution as a way to curb unstable factors that could endanger social stability and public security."

To address the problem, Peng has proposed taxing high incomes at a higher rate and start taxing such properties as real estate, inheritances and interest.

Currently, at least 65 per cent of the country's personal income tax comes from middle- and low-income residents, Wang and other authorities have said.

Rich people who possessed more than 40 per cent of China's wealth evaded tax for many years, Peng said, adding that the country has lost up to 680 billion yuan (US$82.6 billion) in tax each year, which has weakened the nation's ability to assist those in need.

Jin Jipeng, former deputy auditor-general, suggested the country progressively raise labourers' wages in proportion to the gross domestic product.

Source: China Daily