During dialogue 1 “A Conversation with Justin LIN Yifu: The China Miracle” on 27 March, 2015, Justin LIN Yifu talked about making good use of comparative advantage to solve income disparity problems in China.

Mr. LIN believed that the redistribution of income is necessary to redirect wealth from the rich to the poor. But the fundamental solution for China is to encourage the development of industries with comparative advantage. In this way, return on labor acquired by the poor will grow faster than the return on the capital owned by the poor, thus minimizing the income disparity.

He also stated that when the economy grows, the GDP per Capita (or income of individuals) will also increase, thus the potential of new technology increases and new industries born. If the economy wishes to grow and develop, then both the market and the government have key roles to play. The developmental strategy of the government is vital in deciding which industries and region to develop first. While the huge difference between the cities and rural areas is also another important factor of the income disparity in China, the government needs to minimize such disparity using their policies and strategies.