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

Research report No.90, 2017 (Total 5165) 2017-8-11

Abstract: In recent years, income distribution has exerted an increasingly significant impact on China’s economic and social development. When economic development enters the transitional period, this problem will more complicated with more obvious results. Research findings show that at present China’s income distribution is facing three basic contradictions, namely the distribution gap is widening, an olive-shaped distribution pattern has not yet formed and the risk of class solidification is increasing. The factors inducing contradictions of present income distribution include both rational reasons like China’s development phase, difference of historical conditions and market competitions, and irrational reasons like systematic defects, improper security mechanism, and rent-seeking and corruption deals. During the transitional period of economic development, the income distribution area is facing some new challenges: the industrial transformation and upgrading will lead to unemployment due to structural adjustments, technological progress and reform of trading will enlarge the gap between factor distribution and earning capacity, the aging of population will increase the number of poor elderly people, income growth rate of urban and rural residents will slow down, the disparity between employees of different sectors will become tangible, as well as challenging issues resulting from population flow and urbanization drive. These issues need to be given high consideration.

Key words: income distribution, transitional period, characteristics of development trend