Their gains are commensurate with their ability and job performance. On the other hand increases in the incomes of the working class have been curbed because of the large surplus of labour force in China. The high income in some State-monopolized sectors has become a prominent issue. In 1999 income in some monopolized sectors is 1.38 to 2.36 times the income in average sectors. The income gap between different regions especially between the prosperous eastern provinces and less-developed western regions is also getting wider.
China also risks a brain drain under the current distribution system.
The income of Chinese citizens is only a fraction of those in developed countries. The gap between the rich and the poor has put great psychological pressure on low-income earners. An extreme gap between the rich and the poor is unfair and will distort the value of labour. It has become the top job in the reform of the distribution system to bridge the gap. The government hopes the levy of individual income tax will help narrow the gap but in fact the tax is just peanuts for the high-income group.