Cai Fang: We must see that the gains of reform and development benefit all our people in a fair way
Created On : 2017-12-19    Views : 241

Source: Qiushi

Key points:

The 19th National Congress of the Communist Party of China made an important judgment: the principal contradiction facing Chinese society has evolved; what we now face is the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life. That creates a new and higher demand for the work of improving public wellbeing - we must be committed to a people-centered approach to promote well-rounded human development and common prosperity for everyone.

In work on public wellbeing, there are still many areas where we fall short. Rural poverty alleviation by 2020 remains a formidable task; there are still large disparities in development between rural and urban areas, between regions, and in income distribution; and our people face many difficulties in employment, education, healthcare, housing, and aged care. These are all problems that demand our full attention to resolve in line with the guiding principles of the 19th National Congress of the CPC. 

We must focus on the most pressing, most immediate issues that concern people the most and make it the starting point and objective of our work to ensure public access to childcare, education, employment, medical services, elderly care, housing, and social assistance.

To improve people’s wellbeing, we will do everything in our capacity. We will proceed from the reality and try to increase people’s income and welfare level on the basis of higher productivity and sustainable economic growth.

To lead the people to a better life is our Party's abiding goal. The 19th National Congress reached an important judgment: the principal contradiction facing Chinese society has evolved; what we now face is the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life. That creates a new and higher demand for the work of improving public wellbeing - we must be committed to a people-centered approach to promote well-rounded human development and common prosperity for everyone. The report to the 19th National Congress delivered by President Xi Jinping focuses on the most pressing, most immediate issues that concern the people the most. It has made a general plan on how to guarantee and improve the people’s wellbeing and come up with new thinking and initiatives.

01 Ensure and improve living standards through development

The wellbeing of the people is the fundamental goal of development. Since the 18th National Congress, a whole raft of initiatives to benefit the public has seen implementation. People's life has been improved substantially, and their sense of fulfillment has grown stronger. Decisive progress has been made in the fight against poverty. The income for people on low incomes grew faster, and the size of the middle-income group continued to expand. Rural income growth outpaced urban income growth; growth of urban and rural personal incomes have both outpaced economic growth. Employment has registered steady growth, and salary growth tends to be more connected to productivity. Changes have taken place in the distribution pattern, with the Gini coefficient of resident income and the disparity between rural and urban income continuing to narrow down. In result, a social security system covering both urban and rural residents has taken shape, and both public health and medical services have improved markedly. Solid progress has been made in building government-subsidized projects to ensure basic housing needs are met. 

I.   All these groundbreaking achievements we have made in people’s wellbeing lies in the fact that the Central Committee of the CPC, with Comrade Xi Jinping at the core, adheres to a people-centered development philosophy, takes promoting the wellbeing of the people as the fundamental goal of development and use development to strengthen areas of weakness, and strives to achieve shared prosperity for everyone. It lies in the entire Party and the entire nation’s implementing President Xi Jinping’s thought on socialism with Chinese characteristics, for a new era as the basic policy. In accordance with the guiding principles and deployment of the 19th National Congress, we should develop a good grasp of the essence and rich implications of Xi Jinping’s thought on socialism with Chinese characteristics for a new era, adhere to the people-centered principle and insist on ensuring and improving living standards through development, and fully and faithfully apply it in all our work. It is also the fundamental requirement of achieving the two centenary goals and national rejuvenation.

The 19th National Congress made an important judgment: the principal contradiction facing Chinese society has evolved. What we now face is the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life. On one hand, we must stick to development and make the cake bigger; on the other, we must pay special attention to the problem of development disparity and ensure the cake is well distributed. “We must see that the gains of reform and development benefit all our people in a fair way” stresses the importance of establishing and improving all kinds of systems and social policies in a bid to ensure the “cake” is well distributed. In work on public well-being, there are still many areas where we fall short; and alleviation of poverty for the rural poor by 2020 remains a formidable task. There are still large disparities in development between rural and urban areas, between regions, and in income distribution; and our people face many difficulties in employment, education, healthcare, housing, and aged care. We must do everything we can to solve all these problems in line with the guiding principles of the 19th National Congress.

As we work to ensure and improve people's well-being, we must focus on the most pressing, most immediate issues that concern people the most. We should make it the starting point and objective of our work to ensure people's access to childcare, education, employment, medical services, aged care, housing, and social assistance. To that end, we will do everything in our capacity. The basic principle is that everyone performs their duties and shares in the benefits. We will see basic needs are met, prioritize key areas, improve institutions, and guide public expectations. We will focus on improving the public service system and ensuring people's basic quality of life. Our objective is to keep up with people's ever-growing needs for a better life, continue to promote social fairness and justice, develop effective social governance, and maintain public order.

02 Win decisively the war against poverty and improve people’s living standard

Seeing that poor people and poor areas will enter the moderately prosperous society together with the rest of the country, is a solemn promise made by our Party. We must ensure that by the year 2020, all rural residents living below the current poverty line will have been drawn out of poverty, and that poverty is eliminated in all poor counties and regions. In the next three years, we need to get tens of millions of poor people out of poverty every year. The time is rather pressing and the task is arduous. General Secretary Xi Jinping pointed out: "The bugle that calls us to fight a decisive fight against poverty has sounded." We must be determined, steadfast in fighting poverty, and work hard to win the fight”. This is a task we must finish in accordance with the timetable and road map.

To improve people’s living standards, everyone must perform their duties and share in the benefits. Raising income level is one of the most pressing, most immediate issues that concerns people the most. It is also the key to ensuring the long-term sustainability of the fight against poverty and the bottom-up effect of social policies. Employment is pivotal to people's well-being, and also the fundamental guarantee for continuous improvement of people's income level. We must give high priority to employment and pursue a proactive employment policy. According to the characteristics of the major social contradiction in our country for the new era, we should pay more attention to fuller and better-quality employment. China has entered a new phase of population transition. There is negative growth in the working-age population, resulting in significantly less pressure of inadequate employment posts. If we say, before this periodical change, the growth of income mainly depended on economic growth to create jobs, promote employment, reemployment, and labor transfer, and increase the labor participation rate, further increasing income in the future will need to rely more on improving the quality of employment, on the precondition of fuller employment. To make the market play a decisive role in the allocation of resources and give better play to the role of government in the field of employment, on one hand, adhere to the allocation of labor resources by the market and maintain and enhance labor flexibility; improve mechanisms for joint discussion and mediation involving government, trade unions, and employers, in an effort to ensure harmonious labor relations. In addition, despite decrease in the number of working-age population, the structural contradictions of employment remain prominent. Human capital and industrial upgrading is still ill-adapted to each other; the government should provide a full range of public employment services to help college graduates and migrant workers to find jobs or start up businesses, improve labor market supply-and-demand matching, conduct large-scale vocational skills training as a way to solve structural and frictional contradictions in the employment sector. 

We will do everything in our capacity to improve people’s wellbeing. General Secretary Xi Jinping pointed out: it is necessary to proceed from reality and increase income based on the improvement of labor productivity, and to raise the level of welfare on the basis of sustainable economic and financial growth. The concept of shared development emphasizes not only sharing, which is the starting point and objective of our work, but development, which is the foundation and precondition. The report to the 19th National Congress stated that we should increase resident income while maintaining economic growth, and that labor reward should rise simultaneously along with higher labor productivity. On the one hand, if higher resident income and labor reward does not come with faster economic growth and higher labor productivity, it would be meaningless for us to promote economic growth and raise labor productivity. On the other, without the basis of economic growth and labor productivity, there would be no source for us to raise income level and labor reward. That would be unsustainable.

03 Promote social mobility and expand the size of the middle-income group.

To raise people’s income level, the focus should be on increasing income for people on low incomes, adjust excessive incomes, and expanding the size of the middle-income group, hence forming a stable olive-shaped social structure. The report to the 19th National Congress stated that to basically fulfill the objective of social modernization by 2035, we should expand the size of the middle-income group. This is an important indicator and approach to narrow the income disparity between the rural and urban people, between regions, industries and social members. For example, the proportion of the middle-income group plays a key role in the Gini coefficient, an indicator describing the income distribution pattern. That is to say, a bigger proportion of this group can directly lower the Gini coefficient and result in a more reasonable income distribution pattern.

Smooth mobility of labor and talents with equal opportunities is the driving force of economic development, an embodiment of social progress, the essence of social policies and an approach to improve income distribution continuously. As China has built a well-off society in an all-round way and is embarking on a new journey of building a modernized socialist country in an all-around way, the poor in the rural areas will get rid of poverty; the poverty-stricken population will have better access to basic social security; the income of low-income groups will also increase significantly, which means more and more people will join the middle-income group. According to the definition of some international organizations and suggestions of scholars, the middle-income group can be a large-scale group. For example, measured by the level of relative income, those whose income is within 75%-200% of the average income median can be counted as part of the middle-income group; or measured by the level of absolute income, those whose daily income is between 10 and 100 USD on average can also be classified as within the middle-income group. The significance of this broad definition is that social policies and related institutional mechanisms should be able to create the necessary conditions for the horizontal and vertical mobility of population, labor force, and human resources, so that urban and rural residents can continue to move up to a higher income level once they shake off poverty and low income.

To promote social mobility, we need to get rid of the malpractices of systems and mechanisms that hinder the free flow of labor and talents. First of all, we should deepen reform of the household registration system and speed up the process of transferring migrating rural population into urban residents. In 2016, the urbanization rate of China's permanent resident population reached 57.4%, and the urbanization rate of registered population also hit 41.2%. In recent years, as the working-age population grew negatively, the growth rate of migrant workers has slowed down, resulting in a weaker effect on the part of higher labor productivity on resource reallocation. We face a serious challenge to maintain the growth momentum of rural income. Therefore, we must take effective measures to reform the household registration system in order to maintain the momentum of labor transfer and the advancement of new-type people-centered urbanization, and provide a sustained impetus for maintaining moderately fast or high-speed economic growth. Second, the government should put in special efforts to build a vertical social ladder encouraging everyone to move up the ladder. We should eliminate all the institutional barriers formed as a result of various factors, such as the household registration system, industry, region and ownership nature, and improve the fairness of the human capital training system involving education and health, and encourage everyone to increase income and accumulate wealth while participating in the creation of social wealth, thus forming a synergy capable of blocking intergenerational transmission of poverty. By expanding the channels of labor and property income, low income earners can continuously enter the middle-income group, and everyone has the opportunity to realize self-development through hard work.

04 Improve the public service system and promote social fairness and justice

Ensuring people's access to childcare, education, employment, medical services, aged care, housing, and social assistance is the most pressing and immediate issue that concerns people the most, and is an embodiment of the gains of reform and development benefiting all the people in a fair way. We must endeavor to improve the public service system, give priority to education, develop education that people are satisfied with, and promote fairness in education. We will promote the coordinated development of compulsory education in urban and rural areas, and strive to see that each and every child has fair access to good education. We will act on the policy requirements to help those most in need, to build a tightly woven safety net, and to build the necessary institutions, as we work to develop a sustainable multi-tiered social security system that covers the entire population in both urban and rural areas, with clearly defined rights and responsibilities, and support that hits the right level. We shall carry out the healthy China initiative, ensure the delivery of comprehensive lifecycle health services for our people, and deepen reform of the medicine and healthcare system and respond actively to population aging. 

In line with the report to the 19th National Congress, we will see that government plays its function of adjusting redistribution, move faster to ensure equitable access to basic public services and narrow the gaps in incomes. To achieve social fairness and justice, we should focus on creating equal opportunities in the initial distribution to increase labor reward for front-line workers and improve contribution of market evaluation elements and mechanisms of distribution on the basis of contribution. Not only that, the government should play a part in redistribution by improving the redistribution mechanism in terms of taxation, social security, transfer payment, and equal access to basic public services. Historical and international experience shows that primary distribution cannot completely solve the problem of income disparity, and hence the government’s role in redistribution is indispensable. In some developed countries where the income gap is relatively small, their Gini coefficient is not small at the end of the initial distribution, but it is reduced to a more reasonable level, usually through redistribution. In addition, it is necessary to encourage and support the development of charities and give play to its role in the third-time distribution, by giving back to the society and helping the poor. 

To ensure gains of reform and development benefit all our people in a fair way, we need to invest more effort in redistribution, enhance redistribution efficiency, and strengthen coordination between redistribution and primary distribution. First of all, we will continue to deepen reform of the income distribution system and adjust distribution of income. We will require the government to take legal means and reform measures to protect legitimate income, standardize invisible income, and prevent non-market factors such as power and administrative monopolies from obtaining income, and prohibit illegal income. This is the source of social fairness and justice. Secondly, the basic wellbeing of the public should be guaranteed through equal access to basic public services, social protection and protection of the most vulnerable groups, so that the development gains can benefit all social groups. What needs to be stressed is that our country is still in, and will be in, the primary stage of socialism for a long time to come. To improve people's wellbeing and enhance redistribution cannot be divorced from reality. We cannot make too high demands. Nor can we promise the moon. General Secretary Xi Jinping reminded us of the lesson that excessive welfare and over-commitment leads to inefficiency, stagnant economic growth, and inflation, which ultimately results in worsened income distribution, by taking some countries as examples. Therefore, to improve people’s wellbeing via redistribution, we must do everything in our capacity, and tackle issue by issue, year in and year out.

 

(The author is the Vice President of CASS and member of the

Academic Committee of Shanghai Academy)