China's Development Priorities, Parte489

Although China's growth had been rapid over the past two decades, social indicators have continued improving and poverty levels have inched downwards, China faces daunting challenges in improving the quality of growth. These arise from widening inequality, increasing resource and financial imbalances, and growing environmental concerns. The book highlights the significance of these issues and suggests policies for achieving rapid, balanced and sustainable growth.Rapid growth will remain China's principal vehicle for raising standards of living and reducing poverty. Such growth will derive from three sources: urbanization; increased market efficiency; and improvement in the technological capability of Chinese firms.Though growth is a critical ingredient, balance among income groups and among sectors is likely to be vital for social stability. Hence, measures to enhance the quantity and quality of social services and a more effective safety net for the poor are needed and these will require a number of institutional changes including a reform of intergovernmental fiscal relations.To achieve sustainable growth, China will need to eliminate existing distortions in markets for resources along with better enforcement of environmental regulation so as to encourage efficiencies in resource use and to stimulate innovation in this area.