Evaluate solutions to the trade-off between equity and efficiency in China’s economic development

Topics: Poverty, Economics, Economic inequality Pages: 4 (1144 words) Published: December 10, 2013
Evaluate solutions to the trade-off between equity and efficiency in China’s economic development Although China has achieved rapid and remarkable economic growth in the last few years, there persists an inequality in development between urban and rural regions, among districts, and between the economy and society. There are still numerous issues which influence people's immediate interests in fields such as income distribution, education and employment. The problem of the trade-off between equity and efficiency in China’s economy development is extremely complicated. This essay will analyse three solutions to this problem: income distribution system reform; making education equitable, and vocational training for urban and rural workers. Despite certain of potential drawbacks, providing vocational training to rural migrant workers and new members of the workforce in urban and rural areas is the most realistic and beneficial option to balance equity and efficiency in China’s development. These solutions will be evaluated using the criteria of cost, practicality and effectiveness. Reforming the income distribution system can possibly be the most immediate way to change China’s current inequity status quo. This can be achieved by using tax, supervision and subsidy to properly improve the income level of the low-income families, enhance the ratio of the middle-income group and adjust the excessively high income of some monopoly industries (Riskin, Zhao and Shi, 2001). As Feng et. al (1999) point out, income inequality may pose a deadly threat to the stability of the political regime. Hence, this solution, which contributes to achieving a relatively egalitarian distribution of social wealth, has positive effects on political stability and social development. It can improve some impoverished people’s living standards in a short period of time as well as narrow the gap between rich and poor. Nevertheless, relatively egalitarian income distribution may hurt people’s...
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