Focus on incomes could bury SMEs

Earlier this month at the 18th Party Congress, the Chinese government pledged to double the country's average per-capita income by 2020.

While this vow shows that Beijing is committed to improving living conditions for people in the country, such a pledge could also undermine many of the country's struggling businesses, especially heavily-indebted small- and medium-sized enterprises (SMEs).

With much of China's private sector bogged down by rising labor costs, government efforts to drive up personal incomes will only add more weight to their already-heavy load. In fact, if the government forced companies to increase staff salaries, this could lead many businesses to shut their doors altogether.

Rather than placing so much emphasis on incomes, the government should do more to support SMEs. Specifically, if the government gives tax breaks to SMEs and their employees, workers could have more money in their pockets and businesses would find it easier to grow.

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