China's development-paradigm is transforming from Xianfu lun (getting rich first) toward Xiaokang Shehui (well-off society). Building Hexie Shehui (harmonious society) is the key subject of the Eleventh Five-Year Plan of China. Behind the ambitious Eleventh Five-Year Plan, there is a serious problem that China is one of the worst countries in terms of Gini coefficient. Aware of the seriousness of the problem for both social security and regime legitimacy, Chinese leadership has addressed it by adopting a new doctrine of ‘harmonious society’. Despite the new slogan of building “Hexie Shehui,” the gap between the have and the have-not rather continues to grow. This paper traces domestic policy changes since Deng's economic reform. It examines the effects of policy changes on rising disparity and its social consequences. It finally suggests a policy implication.
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