Social Innovation for Inclusive Human Development

23 Aug 2016

Social Innovation for Inclusive Human Development

China National Human Development Report 2016

By Agi Veres

Since the Reform and Opening-up, China’s development has been unprecedented, it has achieved nearly 10% annual GDP growth, become the 2nd largest economy in the world and lifted around 600 million people out of poverty. At the same time, the inequality in social and economic development became more significant, indicated by China’s Gini coefficient (a common measure of inequality) now in the high income disparity category. Development gaps have gradually enlarged between urban and rural areas, and among different regions and social groups. Due to these disparities, the inclusiveness of China’s human development remains a challenge, and UNDP’s recently launched National Human Development Report on ‘Social Innovation for Inclusive Human Development’ in China examines this issue in more details.

Economic growth and increasing development levels are important, but inclusiveness and equality are key to longer-term positive impact and sustainability of human development. To address these issues, China has innovated effective social policies that resulted in good progress over the past decades. The flexible labour market, universal education and disease control, just to name a few, all came with innovative Chinese features, and contributed to human development and social inclusion in China.

However, at the same time, as China moves up to become a middle-income country, it also faces the risk of falling into the so-called “middle-income trap”. Demographic change, and ageing population in particular may contribute to a stagnating or declining economic growth rate, calling for changes in human capital and intergenerational relations. As the economy has stepped into the “new normal” status, it calls for the transformation of social policy-making from scaling up to restructuring, to sustainable urbanization and large scale population movement, which can boost development and support the provision of education, healthcare, and the relocation of migrant workers and their families.

To approach these challenges, China needs to be practical, effective and efficient. As the report finds, China could design clear and purpose-built social policy goals and implement innovative reforms more actively that address inequalities and foster inclusiveness. Economic growth, equal opportunities and social coordination will be the three major drivers for China, and it will be necessary to achieve these in an integrated and coordinated way. The focus of social policies should shift from overall expansion to a more targeted approach. Public investment needs to enhance its efficiency and accuracy, to benefit low- and middle- income groups. With further innovation, social governance mechanisms can build cooperative and inclusive relationships between the government and civil society, as well as between the long-term goals and short-term interests.

The challenges faced by China are special, but China is not alone. The world has seen a promising boom of newly industrialized countries, like India and South Africa, sharing similar challenges. As the report provides analysis for a more inclusive human development, with the ongoing reforms and targeted approaches, China has the opportunity to lead the way and provide concrete case studies for others.

This article was originally published in The People’s Daily, on 23rd August 2016. 

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