China has had a remarkable period of rapid growth shifting from a centrally planned to a market based economy. Today, China is an upper middle-income country that has complex development needs, where the Bank continues to play an important development role.
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International experience suggests that
the effect of globalization on economic growth, poverty and
income distribution can vary significantly among countries,
and that... Show More + 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 Chinaapos;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 farmersapos; 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. Show Less -