Working Paper Series,
Research Institute of Industrial Economics

Abstract: This paper analyzes economic-social interaction in China in connection with the country’s change of economic system. I define an economic system in terms of a multidimensional vector of broad institutional characteristics, and I emphasize that important features of the social development are closely related to specific changes in these various dimensions. I classify China’s options for future social improvements into three broad categories: policies that improve the stability and distribution of factor income; government-created wedges between factor income and disposable income; and improvements in the quantity, quality and distribution of human services, such as education and health care.

Keywords: China; Economic transition; Typology of economic systems; Social reforms

JEL-codes: H00; I00; P20

32 pages, September 28, 2007

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