Second, there is a realisation that while the earlier development model enabled rapid growth, it also led to many negative externalities, such as deepening income and wealth inequality and imbalances in access to public services, such as health and education. This situation is increasingly being viewed from a political risk prism. For instance, in an essay in the Party journal Qiushi in October 2021, Xi Jinping argued, “At present, income inequality is a prominent issue around the globe. The rich and the poor in some countries are polarised with the collapse of the middle class. This has led to social disintegration, political polarisation, and rampant populism — indeed, the lessons are profound! Our country must resolutely guard against polarisation, drive common prosperity, and maintain social harmony and stability.”

Also, boosting broad-based consumption requires not just a large middle class but also a relatively well-off…

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