Investing in people: a worthwhile investment

At a time when China's modernization drive has entered a crucial stage, President of China Institute for Reform and Development and Hainan Institute for Free Trade Port Studies Chi Fulin's new book, A Great Nation Prioritizing People's Livelihoods: The Grand Strategy of Chinese Modernization, launched in Beijing on Friday, offers a timely and insightful contribution to the valuable topic.

Published by CITIC Press, the book embodies over four decades of research and reform experience, and, more importantly, an unwavering commitment to the people-centered philosophy that has guided China's reform and opening-up from the very beginning.

Chi and some of his colleagues belong to the first generation of reform advisors who, in the 1980s and 1990s, provided intellectual support for China's transition toward a market economy. Their proposals — always anchored in reality and guided by compassion — have retained their vitality because they have never strayed from their original aspiration: improving people's livelihoods.

Chi's long-standing conviction that reform and development must begin with and ultimately serve the people runs through all his works. His latest book again emphasizes that China's modernization must shift from an investment-led to a people-centered model, from building more infrastructure to cultivating stronger human capital.

This call could not be more relevant. As Chi stresses, China must move from relying primarily on physical capital investment to prioritizing investment in people — improving the quality of its labor force, nurturing talent, and ensuring fair access to education, healthcare and urban opportunities. Such investment, though indirect, yields the highest returns. The World Bank has found that each additional year of education increases individual earnings by 8–10 percent and contributes significantly to GDP growth. In China's case, with its population of 1.4 billion, this means enormous potential for productivity growth and consumption upgrading if resources are redirected toward human development.

Indeed, investing in people is investing in high-quality development. China's modernization goals are not confined to technological or industrial advancement; they are about creating a modern, inclusive society where the benefits of growth are shared more equitably.

As the fourth plenary session of the 20th Communist Party of China Central Committee reiterated, the essence of China's modernization is ensuring that the fruits of development benefit all people more extensively and fairly. Chi's argument resonates with this vision: improving people's incomes, expanding access to education and healthcare, narrowing rural-urban gaps, and improving public services are not social expenditures — they are productive investments that can drive a powerful cycle of innovation, consumption and job creation.

In practical terms, Chi's book presents a clear road map for this transformation. It proposes that China invest more in "people-centered" development during the next decade — roughly equal to the scale of the country's fixed-asset investment in past infrastructure booms.

He argues that ensuring equal access to healthcare in both urban and rural areas could create new consumption demand. Similarly, increasing input to make senior secondary education universally accessible would raise workforce quality and productivity, while increasing support for families' fertility could ease demographic pressures and strengthen household spending power.

Such large-scale "investment in people", Chi believes, will unlock the consumption potential of China's over 1.4 billion citizens. China still needs to further tap into the potentials of its consumption to boost growth by facing squarely the challenges and the opportunities of rebalancing production and consumption. If government spending in social sectors such as health and education rises by just 1 percentage point of GDP, private consumption could expand by 1.4 percentage points. These numbers illustrate why redirecting capital from concrete to human capital is both economically necessary and socially rewarding.

Chi also calls for advancing people-centered urbanization, ensuring that migrant workers can settle in cities and access public services. This will not only promote equity but also unleash new consumption and investment demand. Research shows that when rural residents move into cities, their consumption rises by over 60 percent. At the same time, reforms to the household registration system and the property rights of rural land can further boost mobility and income.

Importantly, the book stresses that China's socialist system gives it unique institutional advantages in pursuing this people-centered modernization. Unlike some Western welfare states that have fallen into inefficiency or over-dependence, China's system allows it to design and implement equitable, fair and sustainable policies that empower rather than merely assist its citizens. Through institutional innovation and effective governance, China can continue to improve people's livelihoods without falling into the "welfare trap", thus realizing common prosperity in a balanced and pragmatic way.

Chi's steadfast commitment to reform— both as an observer and as a participant — has always reflected academic professionalism and deep empathy for the ordinary people who are the true beneficiaries of development. His foresight in identifying "investing in people" as the next strategic frontier of modernization shows a profound understanding of China's current challenges: an aging population, uneven development and the need for new growth engines. By linking reform theory with operational strategy, A Great Nation Prioritizing People's Livelihoods is not only a reflection on why people's welfare matters, but also a practical guide on how to achieve it.

As China advances toward its 2035 long-term goals and the 15th Five-Year Plan (2026-30) period, Chi's message offers both wisdom and inspiration. Modernization is not just about building a powerful economy; it is about building a great nation that prioritizes people's well-being. Investing in people today will yield the most valuable dividends tomorrow — an educated, healthy, confident population that embodies the vitality of Chinese-style modernization and carries forward the shared dream of common prosperity.