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Reform of China’s Income Distribution System: History and Experience(No. 22, 2016)


By Zhang Liang, Member of the Research Team on “Reform of China’s Income Distribution Mechanism”, Research Department of Social Development, DRC

Research Report Special Issue No. 22, 2016 (Total 1495) 2016-5-30

Abstract:China’s income distribution system has experienced some changes before and after the reform. Prior to reform and opening-up, the distribution principle was solely based on equalitarianism and followed the practice of to each according to his work. After reform and opening-up, with the abandoning of equalitarianism, the distribution principle of to each according to his work was gradually improved. Later, with the development of the socialist market economy, the distribution principle of to each according to work was integrated with the productive factor-based distribution principle, in which the distribution principle of to each according to his work plays a leading role supplemented by other distribution principles. In general, the income distribution system is closely related with the economic reform, and constitutes the major part of the reform. In addition, the reform has all along focused on the improvement of the distribution principle of to each according to his work and the main issue is how to deal with the relationship between efficiency and equity. Viewing from the experience of the income distribution reform, we need to meet the interests of the people, and to deal properly with the relationship between government control and market regulation. We also need to encourage some people to become rich first and let them help others to alleviate poverty so as to bring about common prosperity. By so doing could we promote the reform smoothly and effectively and ensure the sustainable economic and social development.

Key words: income distribution mechanism, reform, review, experience summary, policy recommendations