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Wealth and Knowledge Gaps Challenge China and Asia

Economists agreed Tuesday that the widening gap between the rich and poor is a major problem confronting the world and that both developing and developed nations should work together to deal with it.

"Some experts estimated the 21st century is Asia's century, and we should take the opportunities and confront the challenges as well, especially the wealth and knowledge gaps," said Cheng Siwei, vice chairman of the Standing Committee of the Chinese National People's Congress and a well-known economist, who is attending the 2005 Fortune Global Forum.

"The allocation of wealth is crucial in shortening the gap of wealth," he said, clarifying that the first level allocation should pay attention to efficiency, and make the knowledgeable and hard-working people rich.

The second allocation should pay attention to equality, and the government should help underprivileged groups using tax revenues, and establish a comprehensive, systematic, equal and effective security system in both cities and villages covering retirement, unemployment, medical care, and accidents, Chen said.

He noted the third allocation should take social responsibility as a priority, and the rich should help the poor to improve living standards, education and medical care.

"The gaps of wealth and knowledge are the two challenges in the new Asian century," said Chen.

The time of knowledge is coming, and it characterizes a large proportion of the knowledge cost in products and services, he said. "We should improve our creativity and promote education if we don't want to become nations without 'brains'."

Prof. C. K. Prahalad from the University of Michigan put forward an "equality" mechanism to resolve the disparity between the rich and the poor.

According to Prahalad, the mechanism should consist of four aspects, including equal market access opportunity, equal payment, creativity and protection of ownership.

Stephen Roach, chief economist of Morgan Stanley, said what worried him most was the developed countries' advocacy of trade protectionism, which contradicts free trade.

He mentioned a proposal passed by the US senate in early April saying it will increase tariffs if China doesn't increase the value of RMB. A political decision could have a bad result, he said.

The 2005 Fortune Global Forum, a prestigious world business summit, opened Monday in Beijing. It was the third time in seven years for the high-profile business forum, initiated in 1995 by the US-based Fortune Magazine, to come to China, with the previous two hosted by Shanghai in 1999 and Hong Kong in 2001.

During the three-day forum, featuring the theme "China and the New Asian Century," participants are expected to exchange views on hot issues like corporate governance reform, intellectual property rights, capital markets, auto industry development, technical innovation, energy saving, and the 2008 Beijing Olympic Games.

(Xinhua News Agency May 18, 2005)

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