China's authorities are wrestling with the question of whether increasing the country's wealth or distributing it more evenly among the population is more important.

Since China's opening up in 1978, authorities have focused on increasing national wealth in an effort to make the country more competitive in the global economy, encouraging domestic enterprises to reap as much profit as possible.

Deng Xiaoping, the reformer who set China on the path toward a market economy more than 30 years ago, was the first to encourage a small group of people to first get rich. After all, it doesn't make sense to start dividing a pie that can only feed one person.

But times have changed. Unlike the early years of the People's Republic of China, the country now has the second largest economy in the world. As such, authorities should go out of their way to spread the wealth more evenly among the Chinese people. Otherwise, the widening wealth gap will threaten economic prosperity. Premier Wen Jiabao said that concentrated wealth can destabilize a society. Wealth distribution can also spur wealth creation, but success hinges on execution. If authorities fail to distribute wealth properly, all stakeholders will lose their initiative to create more wealth, said Bo Xilai, secretary of the Communist Party of China Chongqing Committee.

In the book Fault Lines, author Raghuram Rajan, a US economist, has shown how income disparity has grown in the US.

In 1976, the wealthiest 1 percent of American families earned 8.9 percent of overall household income in the US. In 2007, the wealthiest 1 percent took home 23.5 percent of total household income. According to these calculations, for each additional dollar that Americans made as a whole between 1976 and 2007, 58 cents went into the pockets of the wealthiest households. This widening wealth gap reveals that the US government has failed to ensure that the country's wealth was evenly distributed.

But China's authorities haven't done much better. The majority of China's wealth is in the hands of the country's richest residents. And the gap continues to grow, whether among different industries, between low-income and high-income groups, or between the rural and urban areas. What's more, the current system of wealth distribution has further exacerbated this problem. It's not unfair to say that most people in China haven't benefited from the country's recent economic prosperity.

To solve the problem, authorities should take measures to increase the proportion of household income of national revenue, reform the tax system to more efficiently distribute wealth, and put more effort into improving the lives of the country's poor, including improving the social welfare system.