ABSTRACT
Economic growth is the essence of economic development as the rule of law is the essence of a just and stable society. Economic growth does reduce absolute poverty, typically lifting a substantial share of the poorest out of poverty. But their relative poverty generally is not reduced by growth. This introduces several questions: does the structure of the economy evolve as economic growth accelerates? Does economic growth raise the well-being of the lowest income classes? Does economic inequality affect economic growth? Does greater openness and international trade benefit all members of society? Does redistribution through taxes and expenditures reduce inequality? While inequality may rise or narrow with economic growth, the evidence is unambiguous that the poorest in society are benefited by economic growth. Given the rising wages in China's labor markets, its ability to sustain economic growth primarily by exports is ending, and the government is seeking to support growth with increased consumption and housing projects.
