September 2024 | In our fourth webinar of this year’s “Staying in Dialogue with China” series, we spoke to Prof. LI Shi, Dean of the Institute for Common Prosperity and Development, Zhejiang University, about China’s “social rebalancing” as a fourth structural transition as per CMG’s conceptual framework of China’s political economy.
Institutional reforms kick-started in 1978 enabled China’s rapid catch-up. These reforms, however, were applied selectively and thus the development has been heavily skewed towards China’s coastal areas. So, despite officially having eradicated absolute poverty in 2021, the Gini coefficient for the country’s income distribution still stands at 0.467 (2022), much higher than the 0.35 average in Asia.
In 2020, the late Premier Li Keqiang reminded everybody that China still has 600 million people living on a monthly income of 1,000 yuan (US$140), “barely enough to cover monthly rent in a mid-sized Chinese city”. President Xi likewise conceded that “unbalanced and inadequate development remains a pronounced problem”. Problems are thus manifold: domestic household consumption remains structurally subdued, migrant workers still don’t enjoy the same public services as regular urban residents do, and birth rates have been falling rapidly – also due to higher costs of living.
Coming out of the Third Plenum, the mid-year July Politburo meeting as well as the Beidaihe leadership conclave, what are Beijing’s – possibly readjusted – policy priorities and recipes to address these social policy challenges? How has “Common Prosperity” already become a policy reality? What are first learnings from its pilot in Zhejiang province? How will China’s lower-class workers be protected, allowed to unionize and taxed in the future? How can social rebalancing contribute to long-term goals such as stimulating consumption and reviving birth rates?
LI Shi is Dean of the Institute for Common Prosperity and Development at Zhejiang University. Professor LI graduated from Nanjing University’s Department of Economics, and in 1984 obtained his Master's degree from Peking University’s School of Economics. From 1985 to 2005, he worked at the Chinese Academy of Social Sciences’ Institute of Economics. Since August 2005, he has been a Professor and Doctoral supervisor at Beijing Normal University’s Business School.
During his career, Professor LI has founded multiple high-end think tanks such as the China Institute for Income Distribution, the Center for Policy Simulation, the China Center for the Economics of Human Development and more, which have supported the development of Socialism with Chinese Characteristics as well as income distribution theory, and provided important theoretical basis and intellectual support for the major national decision-making strategies.
Professor LI’s main research fields include development economics and labor economics, with income distribution, public policy, poverty and labor market being the focus of his research in recent years.
LI Shi is also a member of the leading group of poverty alleviation and development experts advisory committee of the State Council and the expert advisory committee of the Ministry of Agriculture and Rural Affairs.
Check out the webinar transcript
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