Social Innovation is the Driving Force for Inclusive Development

China has made great progress in human development, yet must continue deepening its reforms and encouraging social innovation to ensure that human development is inclusive and equal and benefits all members in society, says the United Nations Development Programme in its 2016 Human Development Report, launched Monday in Beijing.

The Report, entitled “Social Innovation for Inclusive Human Development”, explores the development challenges of China, where progress has come with increased inequalities and disparities, and provides policy options to address them through innovation on social policies and public governance.

The report is a flagship publication commissioned by UNDP, focusing on pressing global development issues and providing policy recommendations. The 2016 report is developed by UNDP China along with a distinguished team of Chinese and International experts, with research support from the Development Research Centre of the State Council (DRC).

“To shed more light on China’s human development is important to promote China’s inclusiveness, and also allow lessons to be drawn from China on poverty reduction, universal education and social security systems, which provide invaluable experience to other developing countries”, said Haoliang Xu, United Nations Assistant Secretary-General and UNDP Director for Asia and the Pacific.

The report calls for China to use ‘social innovation’ to increase inclusive development, which stresses that it is not only necessary to enhance the average level of human development but also pursue more equal human development, narrowing the gap between different regions, groups and genders. In addition, social policy needs to be more targeted, with a focus on inclusiveness in social protection and an increase in public participation.

China has made huge progress in Human Development

Using the concept of human development, which emphasizes that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone, the report highlights that China has made significant advancements, which in turn has brought China into the group of high-human-development-level countries. China is now ranked 90th out of 188 countries, which is mainly due to rapid economic development and partly social policy.

Thanks to nearly four decades of rapid economic growth, China has become the world’s second largest economy, helping to lift 660 million people out of poverty between 1978 and 2010. In education, the net enrollment rate of school-aged children into primary school has sustained 99 percent over the past decade by adopting targeted education policies and by making education a priority. In addition China’s average life expectancy has also increased from 67.9 in 1981 to 74.8 in 2010 due to improvement of living standards and health conditions.

Being flexible and adaptable is crucial for inclusive Human Development

In the past China has successfully developed and implemented social policies that have been tailored to local contexts, such as land-use right reform, education reform, social insurance, medical security system reform, and strengthening of governance autonomy at the village level, that have helped put China on an inclusive development path.

Specifically, poverty has been dramatically reduced by the government adopting multiple policy initiatives, which have been implemented according to local context. Most recently, targeted poverty alleviation and industry-led alleviation policies have helped promote inclusive development in poverty stricken areas.

For example in Tibet, key industries were harnessed to support local development. By promoting opportunities, local companies in the water sector were able to teach new vocational skills to farmers, and contributed to local economic growth.

In addition, empowering local social organizations encouraged public participation in decision making. For example, in Dalian a new system successfully built a collaborative scheme to assist the government in developing social organizations.

Inequality is still a pressing issue in China

Despite China’s great achievements in human development, it has relied heavily upon economic growth. Since the 1980s income disparities have rapidly widened, with China’s Gini coefficient (a common measure of inequality) ranking among the high income disparity category countries.

There is an imbalance in social and economic development, with the gap widening in income, and in the distribution of healthcare and education opportunities. Life expectancy varies between regions at 80.26 in Shanghai and 68.17 in Tibet (2010) and senior high school enrollment rates are well below the national average (86 Percent) in Qinghai (72.1 Percent) and Guizhou (68 Percent).

This calls for urgent action, especially in light of the newly adopted Sustainable Development Goals (SDGs), whereby reduced inequality is a key target.

China to continue to tailor social policy to tackle remaining challenges over the next 10 years and beyond

Alongside growing inequalities, the report highlights further challenges over the coming years including the change in demographic structure and ageing population, slowing economic growth, large-scale migration, and increase in public expectation and growing digital divide, which will pose challenges for China’s inclusive human development.

The report states that economic growth, equal opportunities and social participation in governance will be the three major drivers for China to achieve inclusive human development in the future.

Specifically, China should tailor social policies to be inclusive and expand coverage to include all members of society, especially the vulnerable and low- and middle-income groups.

In addition, social governance must develop to become more comprehensive and improve engagement, equality and efficiency.

The Report concludes that the world has seen a boom of newly industrialized countries and with China sharing similar challenges, it has the opportunity to lead the way in inclusive human development policies and provide a concrete case study for others.