Building an Olive-Shaped Society: Economic Growth, Income Distribution and Public Policies in China. By CICC Research, CICC Global Institute Publisher, Springer 2025

Abstract

This book, authored by CICC Research and the CICC Global Institute, analyzes China's ambitious goal of transitioning its income distribution structure from a "pyramid shape" (with a large population at the low-income end) to an "olive shape" (characterized by a large, stable middle-income group and small high and low-income groups). This strategic shift is imperative for the new stage of China's development, which requires balancing growth and equity amid significant internal and external changes. The volume first details the current state of China's income and wealth distribution, noting a significant increase in the Gini coefficient of wealth along with economic development since the 1978 reform and opening-up. It explores the primary sources of income disparity, including urban–rural, regional, and intergenerational disparities. Crucially, the book analyzes the limitations of the current redistribution mechanisms, noting the insufficient effects of fiscal redistribution due to the high share of the government sector in primary distribution and the regressive nature of some indirect taxes like VAT. Finally, it proposes a comprehensive policy roadmap, including reforms related to technological progress and the digital economy, external and internal adjustments to address demographic challenges (like revising the retirement age), and exploring paths for public charity with Chinese characteristics.

Keywords. Olive-Shaped Society; Income Distribution; China Economic Growth; Public Policies in China; Gini Coefficient; Wealth Inequality; Fiscal Redistribution; Urban–Rural Disparity.

JEL. D31; H23; J11; O53; P35.