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Development Strategy for People's Livelihood in the New Era

By Ge Yanfeng, Yu Dong & Wang Liejun 2015-07-03

Being of vital significance, improving people's livelihood is the ultimate goal of development and the driving force for social progress. Since the policy of reform and opening up was launched, especially after the convention of the 16th CPC National Congress, China has made marked progress in the fields of improving people's livelihood, whereas is facing a number of challenges in the new era including incomplete social policy system, sharp interest conflicts and completely different public appeals. In view of the new situation and different appeals, we should further highlight priorities and improve the development strategy for people's livelihood in a period to come.

I. Improving People's Livelihood Requires Comprehensive Social Efforts and the Clarification and Fulfillment of Government Responsibility

1. Further clarifying the undertaker and boundary responsibilities for improving people's livelihood

The improvement of people's livelihood requires the joint efforts of individuals, households, society and governments at all levels. It would be improper to either overemphasize or neglect the efforts put in by any of them. Efforts made by individual social members are the foundation for overall social progress, livelihood improvement and comprehensive human development. The households, as the basic unit of social activities, play an irreplaceable role in providing economic and psychological support as well as provisions for the old and the young. Social organizations are also important, as they can promote organized and standardized interest expression, coordinate the interest relationship between different social groups in a more efficient way, improve public decision making and relieve social contradictions. Public undertakings run by non-governmental entities can help to meet social needs at different levels and facilitate mutual help, mutual reliance and harmony. The government fulfills its responsibility by maintaining social and economic order and addressing market malfunctions through establishing various systems.

To summon up enthusiasm of all sides, we must clarify responsibilities respectively held by the individuals, the households, and the state, as well as those jointly shared by the individuals, households and state and those entrusted to social organizations, in light of the economic development, public needs and features in different cases and the government's fiscal power. The responsibilities shall be adjusted and improved along with economic and social progress. We could refer to the valuable experience gained by countries with developed market economy.

The core to clarify responsibilities for livelihood improvement is to define the attributes of all services as products, the pricing mechanism and way of fund raising and sharing. According to the common practice in countries with developed market economy, daily needs for clothing, food, housing and transportation are met by the income of the individual and the household; the old-aged, disabled and unemployed people as well as other vulnerable social groups should depend more on social insurance and social relief system, when their families are deprived of the supporting power. However, the assistance is subject to a strict standard and an adjustment mechanism based on economic growth and price fluctuation. Primary education and other basic public services shall be provided in a standard and free way. Higher and vocational education shall be partially paid by individuals under the strong support of the government. Poor households can enjoy fee exemption or assistance on the basis of the strict income evaluation. Medial services are provided by the government for free or covered by social insurance, and the core is to ensure their accessibility to medical treatment. Other services with attributes of public goods are mainly provided by the government; and life necessities like public transportation, water and electricity are mostly priced in a different way from common consumer goods. Besides the government, individual and households, social organizations are mobilized in many countries to provide non-profit services with government support in various forms.

In recent years, China has made great progress in policy making, but is still bothered by unclear responsibilities, acute randomness and many other problems. In a period to come, we should carefully analyze international experience and the requirements arising from current and future development in China. Responsibility holders and boundaries should be categorized and clarified for different issues concerning people's livelihood; besides, a standard adjustment mechanism shall be established according to the change of social demands.

2. Further clarification and fulfillment of government responsibility should focus on system construction and improvement

The improvement of people's livelihood requires the joint efforts of the whole society, but the government plays an undoubtedly crucial and key role, as the improvement of the economic and social order, income distribution and coordination of interest relationships must all depend on the government through system construction and improvement. This is the basic responsibility of the government and the foundation of power in modern society. The development experience of countries in modern times indicates that the government responsibilities for guaranteeing and improving people's livelihood is generally clear, despite the influence of many factors and behaviors by different governments in various forms and with different priorities. They mainly include: first, the establishment of an incentive mechanism to encourage wealth creation. The key is to create a fair and orderly market, provide to everyone with opportunities as fair and free as possible, encourage competition, labor and innovation; second, the establishment of a fair and reasonable wealth distribution system. The wealth gap must be controlled in a reasonable range, considering the natural difference in capability and endowment of individual social members, the market risks and acute effects of excessive gap in wealth distribution on economic growth and social stability. While maintaining stable social progress, enhancing employment, and intensifying efforts on building a fair market to promote equal primary income distribution, we should adjust the result of the primary distribution by using policy tools such as tax, social security and public services; third, suitable public services should be provided. The government as the major provider of suitable public services can not only address the market malfunctions, but also effectively fulfill the function of secondary income distribution, provide fairer development opportunities for various social members, significantly enhance the overall welfare and creativity and promote lasting and stable economic growth; and fourth, social order and harmony shall be maintained. The most important is to establish an effective mechanism to control actions and mediate interest contradiction. On the one hand, we should balance various interest appeals and establish and keep improving and implementing strictly the legal system on that basis and as per the democratic principle, safeguard people's legal rights and combat improper behaviors. On the other hand, we should establish smooth interest expression channels and coordination and dialogue mechanisms through system construction, and achieve win-win results through mutual supervision and balance by individuals, households and social organizations.

II. Further Clarifying the Direction and Priorities for Livelihood Guarantee and Improvement

With a view to the significance of people's livelihood to economic and social development and the lasting peace and stability of a country and in light of the present and future challenges, we should observe the requirement of the CPC Central Committee to build a harmonious socialist society and reform guidelines proposed in many important CPC conferences, review and summarize domestic and foreign experience, and actively improve strategies and measures for livelihood improvement. The basic guideline for us is to strive to improve the market mechanism, fulfill government responsibility and promote social participation under the principle of fairness and harmony and on the basis of system construction and improvement; and highlight protection of people's economic and social rights, facilitate equality and justice by addressing people's major concerns while further improving people's material and cultural life and allowing them to better enjoy the benefits of reform and development, so as to lay a solid foundation for lasting stability and harmony.

The article was published in China Development Review, No 1, 2014.

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