China’s urban-rural ‘dual economic structure’ fueling inequality, says ex-finance minister
- China must address its two-speed economy in which cities are much more prosperous than the countryside, says Lou Jiwei
- Lou’s call for reform of urban-rural dual economy to achieve ‘common prosperity’ differs from a conventional tax-based approach
China must tackle the yawning economic divide between cities and the countryside if it wants to combat income inequality and deliver on its “common prosperity” promises, outspoken former finance minister Lou Jiwei has said.
Lou Jiwei, who is now a senior political adviser to the central government, said policymakers need to bring a reformist mindset to land, welfare and tax, while easing market concern that the wealthy will be targeted to narrow the wealth gap.
“We do have a rather big gap in income distribution,” Lou told an international conference organised by the National University of Singapore’s East Asian Institute on Wednesday.
China’s “dual economic structure” was the biggest reason for the gap, he said, referring to different land management and welfare systems in rural and urban areas.
02:07
Population decline in China raises concerns of economic implications
“If the dual structure can be improved significantly, this would lower the Gini coefficient to 0.4,” he said, without providing a time frame.
