Source: Qiushi, September 1, 2017

Since the 18th CPC National Congress, the CPC Central Committee, with Comrade Xi Jinping as the core has placed greater emphasis on guaranteeing and improving people’s livelihood, and the construction of peoples’ livelihood has therefore made great achievements. At present the national construction of people’s livelihood is facing a variety of new challenges, requiring us to accurately grasp the major principles in the construction of people’s livelihood in the next period, develop practical measures, promote the construction of people’s livelihood to a new level, and ensure that a moderately well-off society will be built in an all-round way by 2020.

I. Great achievements in the construction of people’s livelihood over the past five years

The CPC Central Committee with Comrade Xi Jinping as the core has led the overall development situation with new development concepts and vigorously promoted the people-centered construction of people’s livelihood, making great achievements over the past five years.

Firstly, the people’s living conditions have continuously improved and the income gap has gradually narrowed. In the preceding five years, the income level of urban and rural residents has increased continuously, the average annual growth rate is not only much higher than the level of price growth, but also exceeds the growth rate of per capita GDP. The residents’ income growth and economic growth are basically synchronous; this is a good situation rarely seen since the reform and opening up. In 2016, the Engel coefficient (the proportion of food expenditure in total consumption expenditure) of Chinese residents’ household consumption has dropped to 30.1%, reaching a well-off level according to international standards. Houses and cars have entered thousands upon thousands of families and the consumption in this respect has been increasing at an unusually high rate. Communication, tourism, leisure, fitness, life-long education and other emerging consumption activities are in the ascendant. The trend of widening income gap between urban and rural areas has been reversed, and the income gap between residents, as measured by the Gini coefficient, has been gradually reduced. The middle-income groups have already reached about 300 million people. Of course, taking the road of common prosperity and forming an olive-shaped distribution pattern are still tough tasks to be fulfilled.

Secondly, the employment situation has remained basically stable and the level of labor rights and interests of migrant workers have achieved a higher level of protection. In every country of the world, employment status is a barometer of economic development and also a key indicator of government achievements. At present, China’s downward pressure on economic growth and the pressures of transformation and upgrading are increasing. For some traditional industries with excess capacity, cutting overcapacity can be a very heavy task to be fulfilled and a considerable number of labor-intensive small and medium-sized enterprises are faced with operation difficulties. Under such circumstances, China has adopted a more active employment promotion policy and properly resettled the workers of those enterprises involved in overcapacity reduction. As a result, the employment situation has remained basically stable and the unemployment rate has been controlled at around 5%, according to the survey in the cities and towns. Under the circumstances of global economic slowdown and high unemployment rate in some developed countries, it’s really not easy for China to maintain stable employment at the time of such downward economic growth. Meanwhile, China has constantly improved the laws and regulations on the protection of workers’ rights and interests, and the average wage level and the level of guaranteeing working rights and interests of hundreds of millions of migrant workers has been steadily improved. Although this has certain effect on the competitive advantage of labor-intensive enterprises in China, in the long run, whether from the perspective of the acceleration of industrial transformation and upgrading or from social progress, it is a threshold that must be crossed sooner or later.

Thirdly, remarkable achievements have been made in invigorating the country through science and education, and a new demographic dividend is taking shape in China. With the growth of the economy, China has increased its input in education and research, especially giving priority to education. Although China is in urgent need of investment in the construction of all aspects of people’s livelihood, only education is guaranteed in the form of law. The state’s fiscal expenditure in education measured 4% of GDP in the current year, which was rather rare amidst the sharp slowdown in its fiscal revenue growth. At present, while comprehensively implementing the 9-year free compulsory education scheme in urban and rural areas, China has actively explored the system optimization of pre-school education and high school education, and strengthened education support for those children in rural poor families, basically solving the schooling problem of the children of migrant workers. China's higher education has achieved great-leap-forward development; the gross enrollment rate of the institutions of higher education (the ratio of young people of the right age attending colleges and universities) has now reached about 40%, while this figure is around 60% in the cities and towns. Under the circumstance that demographic dividend marked by total amount and proportion of the labor force has gradually weakened, a new demographic dividend marked by the quality of the labor force (average education level and average skill) has been taking shape, laying a human foundation for the transformation and upgrading and future development of China’s industry.

Fourthly, the level of social welfare has steadily improved and China has built the world’s largest social security network. The social security system and social welfare system are a safety net for the residents of a country. As a populous country, China’s social security system had covered a relatively low proportion of the population in the past. After entering the new century, China has accelerated the establishment of a social security system covering both urban and rural areas. In the preceding five years, China's social security undertakings have developed rapidly. As of the end of 2016, the number of people covered by basic endowment insurance across the country had reached 890 million; the number of people covered by basic medical insurance in cities and towns had reached 750 million; and 877 million of entitled groups had received pensions and subsidies provided by the state. China has built the world’s largest social security network covering urban and rural residents with a basic endowment insurance system, basic medical insurance system and minimum subsistence guarantee system as the pillar, with five types of insurances of endowment insurance, medical insurance, unemployment insurance, work-related injury insurance and maternity insurance as the framework, and social welfare, social assistance, and housing security as the supplement.

Fifthly, the population enduring extreme poverty has been greatly reduced, and the poverty stricken population under the current standards will eventually be completely eliminated. Over the past 40 years, since the reform and opening up, hundreds of millions of Chinese people have been elevated from extreme poverty, which has received high praise from the international community. In the preceding five years, China has further strengthened its efforts in poverty alleviation and poverty reduction and proposed that all rural poverty stricken populations under the current standards should be eliminated by 2020. As calculated by the current rural poverty standard of 2,300 yuan per person per year, China’s poverty stricken population in rural areas still had 43.35 million in 2016, a decrease of 12.4 million over the previous year. In four years from 2017 to 2020, China will reduce the poverty stricken population by more than 10 million per year. This is a remarkable poverty reduction project that has attracted worldwide attention. The task is very arduous and also faced with many difficulties. But just as General Secretary Xi Jinping stressed, “without a well-off life of the rural population, especially without a well-off life of rural population in impoverished areas, there will be no well-off society in an all-round way.”

II. Important principles to be grasped in order to promote the construction of people’s livelihood at this stage

Great achievements made in the construction of people’s livelihood over the past five years marks a new height in our people's living standards and a big stride towards building a well-off society in an all-round way. At this stage, to vigorously promote the construction of people’s livelihood, we need to grasp the following important principles.

Firstly, the construction of people’s livelihood is of supreme political importance. Competition in social systems around the world and the public attitude for or against the country and society all determine the political significance of the construction of people’s livelihood. The superiority of the socialist system with Chinese characteristics will finally be reflected in the continuous improvement of the country's comprehensive strength and of people's living standard. In this sense, the construction of people’s livelihood is of supreme political significance. This is a major principle.

Secondly, the construction of people’s livelihood should be based on economic development. Economic development is the foundation for the construction of people’s livelihood. No country in the world can continuously improve the people’s livelihood without pushing the economy forward. However, economic growth follows the law of periodic fluctuations, while welfare and people’s livelihood expectations tend to be a rigid growth trend. Therefore, the principle of synchronizing the construction of people’s livelihood with economic development shall be followed, windy welfare promises hindering the development of the country shall be avoided, and the kidnapping of public opinion with populist welfarism shall be avoided too.

Thirdly, the resources of inputs in the construction of people’s livelihood should be diversified. Economic development depends on invigorating enterprises and markets and lowering the tax burden, while lowering the tax burden will reduce fiscal revenue. If the construction of people’s livelihood relies too heavily on the fiscal budget, it will become “water without a source”. Therefore, the construction of people’s livelihood must adhere to the principle of increasing income and reducing expenditure. On the one hand, the barriers of interest must be broken through, to substantially reduce unnecessary administrative expenditure and those personnel supported by government finance; on the other hand, sources of revenue should be diversified, and various social forces should be mobilized and encouraged to promote the construction of people’s livelihood.

Fourthly, the mechanism for the construction of people’s livelihood should be considered from a long-term point of view. Attention should be paid to long-term system and mechanism construction. As China is a big country with more than 1.3 billion people, to build a kind of people’s livelihood construction system will have great influence on the future. Moreover, once the system is established, there will be “system dependence”, and it will be difficult to change. We should adhere to the principle of moderate and general welfare to improve living standards step by step, and to the principle of “providing timely help” rather than “icing on the cake”, with priority given to the support of the most needy groups in society; and we should adhere to the principle of underpinning by social policies to guarantee everyone’s right to survival and right of development.

Fifthly, the construction of people’s livelihood should be sustained for a long time and adhered to, for it is a long-term task. Although China is already the second largest economy in the world, yet it is still a developing country. There is still a big gap between China and developed countries in terms of per capita economic output level, per capita resource level, per capita living and welfare level. Improving people’s living standards, perfecting the social security system, narrowing the income gap, reducing and eliminating poverty (including relative poverty), all these can’t be accomplished at one stroke, but must be done with perseverance. Empty calls for unrealistic goals are not enough.

(The author is Vice President and member of the Party group of the Chinese

Academy of Social Sciences and President of Shanghai Academy)