. China News .

China needs 'full-scale' reform to fight inequality
by Staff Writers
Beijing (AFP) Feb 8, 2013

Hong Kong activist jailed for burning Chinese flag
Hong Kong (AFP) Feb 8, 2013 - A prominent Hong Kong political activist has been jailed for nine months for burning both the Chinese and city flags during anti-Beijing protests, court officials said Friday.

Pro-democracy campaigner Koo Sze-yiu was sentenced by a magistrate's court on Thursday on four charges -- three of desecrating the national Chinese flag and a fourth of desecrating the Hong Kong flag, a judiciary spokeswoman told AFP.

"When I am released, I will do this again," Koo told the court, according to the South China Morning Post.

Koo said he burnt the national and regional flags because he was unhappy with the regime in mainland China, which he claims killed Chinese dissident Li Wangyang, and over the jailing of Nobel laureate Liu Xiaobo, the SCMP reported.

The charges against Koo, 66, came after he burned a Chinese flag outside the central government's liaison office in June last year, during a protest to commemorate the death of Li.

He was also seen with damaged Chinese and Hong Kong flags at a demonstration against Chief Executive Leung Chun-ying, who is considered by critics as a stooge for Beijing, on January 1 this year.

Hong Kong saw massive anti-Beijing protests last summer with hundreds of thousands taking to the streets when Chinese President Hu Jintao swore Leung into office, amid growing discontent over the influence of the mainland.

Speaking in court Thursday, magistrate David Chum said the flags had to be protected.

"Every country has her national flag... it is the symbol of the country and represents its dignity," he said, according to the SCMP.

Under Hong Kong's National Flag and National Emblem Ordinance, anyone who defaces the flags faces a a jail term of up to three years.

Koo was also part of a crew which landed in August on an island chain, known as the Senkakus in Japanese and Diaoyus in Chinese, which is disputed by China and Japan.

Hong Kong, a semi-autonomous territory with its own political and legal system that guarantees civil liberties not seen on the mainland, including the right to protest, was returned to China by Britain in 1997.

China's stated aim to narrow the income gulf between its sports-car driving elite and vast numbers who still live in poverty will need radical political and economic changes to work, say economists.

Long-delayed "proposals on the distribution of income" were announced this week ahead of Sunday's Lunar New Year, as hundreds of millions working in cities returned to their rural homes, many without running water or heating.

Beijing promised to improve the lives of these rural migrant workers, who are denied equal access to health, education and housing services in cities under a half-century old system of residency permits known as "hukou".

"Migrant workers from rural areas will be assisted to register as citizens and entitled to all basic public services in the cities," according to the measures quoted by the official Xinhua news agency.

But the aspirational document was generally short of concrete steps.

Tax reductions will be "promoted" for low- and middle-income earners, it said, and the government will "target" reducing the number of people living on less than $1 a day by around 80 million by 2015.

In 2011 Xinhua said 150 million Chinese live on less than that, a stark contrast to the country's image as the world's manufacturing heartland, the holder of its biggest foreign exchange reserves and a motor of global recovery.

The extent of inequality in China, particularly between urban and rural areas, saw authorities refuse to publish the country's Gini coefficient, a commonly used measure of inequality, for more than 10 years.

In December a research centre which operates under China's central bank said its Gini coefficient stood at 0.61, one of the highest in the world. A Gini figure of zero represents perfect equality of income and 1 total inequality.

Last month China's government said the figure was 0.47, higher than the United States, and above the 0.4 figure widely cited as a "danger level" for social discontent.

Research centre director Gan Li questioned the official statistic, arguing that the government "has not published the percentage of people who refused to answer" and "the richer they are, the more likely they are to refuse to answer".

Like other economists, Gan believes the authorities underestimate the incomes of the wealthy, who hide a significant portion of their earnings.

China has seen an explosion in its luxury goods market -- which grew 56 percent last year -- as Western makers of products from designer handbags to yachts and supercars pile in.

The boom casts doubt on government statistics saying the top 10 percent of earners had an average annual income of 59,000 yuan ($9,500) in 2011, economist Wang Xiaolu said recently in Caijing, a respected economics journal.

"Solving the income distribution issue requires full-scale reform," he wrote on his blog.

Aware of the growing resentment against the rich and endemic corruption, the Communist Party is urging officials to be frugal, pledging strict controls on government spending on banquets, car purchases and overseas travel.

But many observers say that fundamental tax reforms are essential to create more equal income distribution.

China should introduce a national property tax and inheritance tax, economist Hu Xingdou of the Beijing Institute of Technology told AFP.

The government plan said only that property tax, which some cities have been experimenting with, will be extended, and inheritance tax will be introduced "at the appropriate time".

Local governments derive much of their income from land sales, leading to many farmers being evicted from their land and compensated below market rates.

The newly released plan says that farmers will be "guaranteed proceeds" from land sales, but Hu called for greater changes to China's system of property rights, where all land is officially owned by the state or rural collectives.

"Farmers should be able to develop or sell their land, which is their collective property," he said.

Mao Yushi, a guru of economic liberalisation in China, called for reforms to the financial system, where firms with close connections to the state receive the vast majority of bank loans, leaving small-business owners short of capital.

"The princelings can go to the bank and get money just on the strength of their status and get rich on this basis," he said, referring to the children of members of the communist elite.

"The two-tier society of rich and poor is everywhere. The distinctive characteristic of China is people who have special powers and bully others."


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Hong Kong (AFP) Feb 7, 2013
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