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By Feng Wenmeng, Zhang Liang & Ge Yanfeng, Research Team on “Strategic Policies Leading the New Normal of Economic Development”, DRC

Research report No.91, 2017 (Total 5166) 2017-8-14

Abstract: In order to resolve contradictions relating to income distribution in the transitional period, we need to take into consideration three factors in formulating the major policies. First, we need to construct a protection mechanism for poor people to guard against risks. Second, we need to narrow the income gap and let it no longer become widened. Third, we need to ensure equal opportunity for everyone, promote social mobility and prevent class solidification. In the process of implementing the policy, we need to pay attention to the following aspects. In terms of avoiding poverty risks, it is necessary to distinguish the poor people from those on the edge of poverty, identify key groups, and focus on the elderly and farmers. In terms of controlling and narrowing the gap of income distribution, we can start with primary distribution and redistribution and establish a reasonable salary system in public sectors by creating a fair market environment. We need to further crack down on corruption and illegal income, let primary distribution play a proper role in promoting fair distribution of income, give full play to the role of taxation, social security and transfer payments, and enforce regulation on redistribution. In terms of promoting social mobility and avoiding class solidification, we need to formulate and implement comprehensive countermeasures on issues relating to education, employment and housing system.

Key words: income distribution, policy options, transitional period