Resource information
International experience suggests that
the effect of globalization on economic growth, poverty and
income distribution can vary significantly among countries,
and that its impact depends crucially on national policies.
This report assesses the possible patterns of inequality in
China in the future, and outlines policy options that could
help accomplish China's objective of growth with
equity. For sustaining growth, the report emphasizes the
freer flow of resources and goods and services in the
economy, to be achieved by domestic market integration and
flexibility. The report suggests that the cost of market
fragmentation and rigidities is high, and highlights
measures to reduce local protectionism, facilitate
migration, and commercialize the banking sector. To optimize
the results of domestic market integration and promote
growth with equity, the report proposes a package of policy
actions that would promote new job opportunities, especially
in the less developed regions, and raise returns on farm
labor and land. Among these, the report highlights investing
in people, promoting the diffusion of technology,
facilitating urban agglomeration, expanding services and
enhancing farmers' prospects. Finally, the report
tackles the social, economic and fiscal risks that may
threaten future growth and distributional performance. In
particular, it suggests extending different types of formal
social security in both urban and rural areas, for fixing
the inter- government fiscal system in order to facilitate
the provision of public services, and for managing fiscal
risk beyond the government budget and officially recognized debt.
