China unveils official income redistribution rules

What could be the meaning of these new guidelines?

According to DBS, China has just unveiled official income redistribution reform guidelines aims at substantially improving the lives of peasants and rural people gradually over time.

Explicit targets include increasing household incomes and labor wages as a percentage of national incomes, as well as increasing social expenditures over total expenditures.

Blueprints on urbanization and financial market reforms are interwoven into the guidelines. A whole paragraph was devoted to discussing the registration of migrant workers in an orderly manner.

Here's more from DBS:

Currently, migrant workers are not necessarily registered as urban residents despite working and living in urban areas, thereby missing out on health and education benefits.

The guidelines mentioned that migrants residing in an urban area for a specified period of stable employment with contribution to social security will be gradually registered as urban residents.

This is a strong indication that China is preparing to speed up household registration reform.

Regarding expansion of income sources for individuals, the guidelines mentioned various types of financial reform such as deepening the development of capital markets, enforcing company dividend policies, strengthening investor and depositor protection, pushing forward interest rate liberalization, as well as enriching the scope of bond and currency funds.

Structural reforms in China will encompass changes in social, economic and financial domains that are often interlinked. This will truly test the Chinese government's interdepartmental coordination and execution ability. Given the size of the country, this is a monumental task.