ABSTRACT
China's planned economy was established in 1958. The rural-urban dualism, based on the coexistence of urban and rural household registration systems implemented in 1958, was a major structural overhaul that consolidated the planned economy nationwide. Three forms of capital are conceptualised in economics. The first is material capital, according to traditional terminology. The second type of capital is human capital. The third type of capital is social capital. In a market economy, whether or not one has access to social capital and how much social capital one has makes a significant difference. Distribution by the operation of the market is called primary distribution, while the distribution by government regulation is called secondary distribution. In deepening the structural reform of the Chinese economy, the reform of the income distribution system is vital and requires urgent implementation.
