“Distribution? Only Poor Wretches and Billionaires!”Income Growth and Downward Redistribution: Poverty Elimination, Wage Increases, Tax Cuts, Purchasing Power, and Inclusion—A Middle-Income Nation Emerging, and Pressure on Oligopolies and Billionaires

Wolfram Elsner () and Elyar Najmehchi
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Wolfram Elsner: University of Bremen (ret.)

Chapter Chapter 8 in The Rise of China, 2026, pp 207-219 from Springer

Abstract: Abstract This chapter examines China’s approach to income growth, poverty eradication, and downward redistribution, highlighting both bottom-up and top-down strategies. Between 1981 and 2020, China lifted over 850 million people out of absolute poverty, achieving the United Nations Millennium Development Goal on poverty reduction ahead of schedule. This success relied on massive job creation, rural development, structural transformation, wage increases, and the “Household Responsibility System”, which enabled rural populations to secure stable incomes. Complementing these measures, the chapter analyzes China’s approach to reducing top-end inequality. Despite hosting over 800 billionaires and millions of millionaires, China has systematically pursued redistribution through progressive taxation, regulation of corporate profits, anti-corruption enforcement, and enforced private participation in infrastructure investments. These interventions have gradually reduced the Gini coefficient from a peak of 0.49 to approximately 0.43, with a medium-term target of 0.32, demonstrating sustained structural influence on aggregate income distribution. By integrating land reforms, labor protections, social security expansion, tax relief, and targeted fiscal policies, China has promoted both economic growth and social equality. The chapter illustrates a rare model in which a rapidly growing economy successfully balances wealth generation, inclusion, and long-term redistribution, reflecting a multi-objective development strategy grounded in a socialist perspective.

Date: 2026
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DOI: 10.1007/978-3-032-20260-4_8

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