20 FINANCE & DEVELOPMENT | December 2018
China strives to adapt social protection to the needs of a market economy
here was bound to come a time in China’s
modern development—starting in 1949
with the founding of the crad le-to-grave
welfare state—when the demands of the
people for a better life outgrew the ability of the
People’s Republic to deliver.
at time could be now.
China thrived durin g decades of near double-digit
growth since Deng X iaoping ﬁrst experimented with
local markets a nd untethered parts of the economy
from state control in the 1980s and 1990s. e
country’s rapid advance from developing nation
to claim the No. 2 spot among the world’s largest
economies spawned a massive middle cla ss and
hundreds of billionaires.
But growth was uneven, leavin g yawning gaps
between rich and poor, between prosperous c oastal
cities and neglected, larg ely rural, inla nd regions.
Along the way, China sought, with mixed re sults,
to adapt services such a s pensions and health care
to the demands of an increa singly market-driven
economy. Today, as the government of Xi Jinping
struggles to reconcile the aspirations of the rising
middle class with t he needs of the millions who
remain in poverty, it must also contend with the
challenges of slowing g rowth.
In an October 2017 address at the Communist
Party’s National Congress ahea d of his second ﬁve-
year term, Xi ack nowledged that the government
had essentially f allen short of people’s expectations.
He set out to redeﬁne how the Communist Party
would provide for its citizens for decades to come.
“As socialism with Chinese ch aracteristics ha s
entered a new era, the principal contradic tion facing
Chinese society ha s evolved,” Xi told thousands
of party delegates g athered in the Great Hall of
PHOTO: XU YU XINHUA NEWS AGENCY/NEWSCOM
Workers make clothes at a factory
in Tongxiang, China.