Inclusive Growth
Inclusive growth （包容性增长）refers to both the pace and pattern of economic development, with the idea that rapid growth is necessary for reducing poverty but is only sustainable if it includes a large part of the country’s labor force across broad sectors of the economy. In this way, inclusive growth is seen as development with fairness and equality. It has been politically termed as the growth unexceptionally benefiting people all around the world, regardless of color and region.
The advent of the modern phrase can be traced back to 2007, when a group of economists at the Asian Development Bank defined it for an improved economic strategy. In contrast to simple economic growth, in which development may increase at the cost of equality and social stability, and possibly trigger trade protectionism, inclusive growth emphasizes protection of the weak, the balance of the economy in addition to free trade.
The term was popularized after they were adopted by Chinese President Hu Jintao in his keynote address to the Fifth APEC Human Resources Development Ministerial Meeting in September 2010, in which the inclusive growth became the key word in describing China’s future development.
China’s initial development plan when they opened up and reformed their economy was to develop certain groups of people and regions first. It triggered a dynamic economy at first, but as reform continued, severe social and environmental problems emerged. Income disparity became one of the most obvious problems, posing a potential threat for future development. According to the World Bank, China’s Gini Coefficient, which measures the gap between the rich and poor, has surpassed 0.4, the warning line for social stability.
The double-digit growth of China’s GDP has also brought forth numerous problems concerning fairness, environmental protection and energy reservation. Zhuang Jian, chief economist of ADB’s Chinese branch, said China needs to keep growth at a sustainable and appropriate rate and shift more concern to social development. The idea of inclusive growth was raised in time for economists and policy makers to think of a new route for better development. Policy makers have realized the hazards of the traditional economic growth model, which mainly relies on exports and investments. They are mulling through a new pattern of growth, which needs structural reform and inclusive growth to play a key role.
“The current growth of the economy cannot benefit everyone in the country,” said Tang Min, vice secretary general of the China Development Research Foundation. “Some have benefited from the growth, while others, especially the poor, have benefited little.”
According to Tang, inclusive growth can refer to many aspects, including environmental protection and harmonious society. Yet the core value of the words can be explained as benefiting low-income groups, especially farmers, to increase their proportion of income in the GDP.
“Inclusive growth” became a buzzword at the Central Committee’s plenary meeting in October, in which the 12th Five-Year Plan was discussed, and will likely be written into the plan, Xinhua reported.
