Chi Fulin, president of China Institute of Development and Reform, says increasing the middle class population is the key to the issue.

 

　　"China's middle classes currently make up 23 percent of the total population - that's about 300 million people. Can we increase the rate to 40 percent, which would equal 600 million by 2020? That's a very concrete goal and we need to have an action plan to achieve it."

 

　　However, while he says the middle classes hold the key to great consumption potential, there are still certain obstacles.

 

　　For the average person on the streets, the problems seem to be not enough money to meet rising expenses.

 

　　"The monthly expense is about 14 hundred yuan for me including eating, utility, and rent. And as I'm getting old, I have to leave a certain amount of money for my medical expenses as well. So there's not much left to save."

 

　　"5 thousand, that's the minimum wage to live here in Beijing I think. Food prices are going up while my salary more or less remains the same. And most of all I have to pay the personal income tax."

 

　　To address the issue, some NPC deputies and political advisors have suggested raising the personal income tax threshold to 5 thousand yuan or perhaps even 6 thousand as one of the ways of dealing with the problem.

 

　　But Jia Kang, director of the Research Institute for Fiscal Science under the Ministry of Finance says tax is a vital tool, and the way forward could be by re-assessing the minimum wage as well.

 

　　"The government should respect the market rules of resource allocation whilst creating an environment for fair competition. This includes adjusting the minimum wage standards among different regions properly."

 

　　The income tax exemption threshold was lifted from a monthly income of 2 thousand yuan or roughly 310 US dollars to 35 hundred yuan in 2011.

 

　　However, Jia says to optimize the effects of that move, the higher income earners need to pay more.

 

　　"What is more urgent and essential is to break the monopoly of state-owned enterprises, and enhance the transparency of the income distribution rules. Taxation for high-income people should also be hiked and we should find an efficient way to monitor this group."

 

　　Li Min, the provincial Finance Bureau chief of Guizhou, says another effective way is to let the rural populations enjoy what city dwellers already have.

 

　　"We need to raise the expenditure on improving impoverished people's livelihood, to ensure the allowance and subsidies for those who need it the most. This is very important."

 

　　Aside from increasing expenditure on public welfare, suggestions have also been made to reform the land requisition system, treat farmers-turned-workers equally as urban residents and provide their families with social welfare.

 

　　The current thinking seems to be, only when migrant workers enjoy the same benefits as the rest of the city, will they have the ability and desire to spend more freely.

 

　　For CRI, I'm Su Yi.