Abstract: Although China has maintained a higher level of economic growth for many years, the income ditterences ol Chinese residents have been enlarged gradually. Statistics have shown that the income differences between cities and countryside, prosperous and remote areas have reached the highest in the world because of the break-through of international warning marks in income differences of Chinese residents, it not only affects the effective needs and the input effectiveness of productive factors, but also the rising of economic efficiency, it's not beneficial to the prolonged and stable economic growth therefore, if China wants to achieve a rapid development in economy, fair distribution must be considered, and the income differences must be narrowed so as to keep the trend of prolonged and stable economic growth.