Recent research has shown that not always economic growth leads to better living conditions, improved medical care, longer life expectancy for the poor and the poorest. One reason is inequality of wealth and unevenness of growth. On average the whole population is better off, however, there is a huge difference between wealth of first quintile and last quintile, which means, millions of people worldwide might actually be worse off.Under these conditions, GDP growth rate or per capita GDP growth rate are not good measures of economic growth. As a result, a new methodology has been offered for assessing the development of countries - a tool known as “inclusive development index”. According to authors from World Economic Forum[1], this new method of assessing is more comprehensive and takes into account eleven dimensions of economic progress in addition to GDP to evaluate more precisely well-being of the population and its quality of life.According to the World Bank, inclusive growth refers both to the pace and pattern of growth, which are considered interlinked, and therefore in need to be addressed together. In this relationship, we are talking not only about bringing the gap between rich and poor closer, but also about equal conditions for obtaining education, ensuring the protection of health and safety. Therefore, an inclusive approach to growth provides for a long-term strategy based on productive employment.Along with an openness policy, an inclusive development strategy has become an integral part of the economic reforms of the Chinese government. Starting from 2004, China has approved the concept of a “harmonious society” based on the principles of inclusiveness: economic growth, equality, continuous and stable development. Chinese harmonious society is democracy and rule of law, equality and justice, trust, coexistence of man and nature.The strategy of inclusive economic development is reflected in the Five-Year National Plans of Economic and Social Development of the PRC, as well as in long-term strategies until 2030 and 2050, where the main goal is global innovation leadership and an innovative nation.According to the final Five-Year Plan of China, the key components of China’s economic strategy are an innovative economic structure, intensive industry, coordinated regional systems, green development, an inclusive society, an open worldview and economic institutions. An inclusive society itself provides for focusing on education, science, culture and health, and intensifying efforts to overcome poverty. An inclusive development model is built on the basis of social justice and stimulating domestic consumption.China has already done a tremendous job in overcoming poverty. According to the World Bank, more than 850 million people moved out of extreme poverty as China’s poverty rate fell from 88 percent in 1981 to 0.7 percent in 2015, as measured by the percentage of people living on the equivalent of US$1.90 or less per day in 2011 purchasing price parity terms. This is in line with most developed countries - USA (1%), Sweden (0.61%), Germany (0.19%), Italy (1.5%), etcEsteban Ortiz-Ospina, Feb 2013, https://ourworldindata.org/extreme-poverty-in-rich-countries-what-we-know-and-what-we-dont-know.">[2].Over the past 10 years, the Chinese economy has slowed down, which is due to a reorientation to stimulate domestic demand. The average annual growth rate of real GDP is 6.4%, and per capita GDP (PPP, current international $) increased from $ 2936 in 2000 to $ 18,210 in 2018 (Figure 1). Figure 1 GDP per capita, PPP (current international $) - China, 2000-2018 The growth of per capita income is accompanied by a narrowing of the gap between the rich and poor in the PRC. According to World Bank, GINI income distribution inequality coefficient dropped from 43.7 in 2010 to 38.6 in 2015. However, it should be noted, that these values are still high, they are around the warning level of social unrest established by the UN, i.e. 40. Such a high indicator indicates income concentration in certain groups of the population. Figure 2 GINI index - China, Germany, Italy, Sweden, USA, 2000-2015 One of the priorities of China’s inclusive economic growth is to stimulate domestic demand and consumption. With fiscal stimulus, the PRC government is reducing its dependence on external demand by increasing domestic demand. This is the main source of maintaining growth of the Chinese economy, but with a moderate slowdown.China is lowering the gap between the rich and the poor partly by urbanization. Chinese government comprehended - already in early 1970’ - that quick poverty reduction, literacy bounce, etc. are only possible in urban areas. After persistent high values, the growth rate of urban population has been falling from over 4 percent in early 2000, to around 2.5 percent in 2018. However, even these values are at least twice that of most EU countries (Figure 3).In contrast to most European countries and the United States, China’s urbanization rate was much lower until mid-seventy’s, and is still lower than 60% (Figure 4). In our prediction, China will continue to boost its economy by increasing share of urban population for at least until 2030, when it gets close or surpasses EU countries by this measure. Figure 3 Annual urban population growth, China, Germany, Italy, Sweden, USA Figure 4 Urban population (% of total population), China, Germany, Italy, Sweden, USA According to the distribution of gross regional product, three leading provinces are Guangdong, Jiangsu and Shandong (Figure 5). To prove our urbanization hypothesis above, these three provinces are also most densely populated provinces. The highest GRP per capita are in Beijing (140 thousand yuan), Shanghai (135 thousand yuan), Tianjin (121 thousand yuan), Jiangsu (115 thousand) all of which are known for gigantic cities. For comparison, country average GDP per capita in 2018 was 64.6 thousand yuan.The application of regional strategies for economic and innovative development, which led to the creation of a favorable investment environment by opening special economic, industrial, technical and economic developed and export zones, ensured the production leadership of the above provinces. They concentrated financial, industrial, innovative potential and human capital. Figure 5 Gross domestic product (GDP) of China in 2017, by region (in billion yuan) According to the WEF estimates presented in the report “The Inclusive Development Index 2018”, China scored 4.09 and ranked 26th among 74 developing countries. Performance is mixed among BRICS economies: the Russian Federation (19) is ahead of China (26), Brazil (37), India (62), and South Africa (69). Although China has ranked first among emerging economies in GDP per capita growth (6.8%) and labor productivity growth (6.7%) since 2012, its overall score is brought down by lackluster performance on Inclusion[3]. Inclusive development - China’s position is #55 in this measure - is hindered by such factors as inequality in the distribution of income and wealth, an increase in the demographic burden coefficient (the ratio of the number of dependents to the working population), and also the intensity of carbon dioxide emissions.Another pillar where China scored high (17th among 74 countries) is Intergenerational Equity and Sustainability pillar. It is augmented by its low population dependency ratio (39 dependent people for every 100 working-age population, the second-lowest in the IDI sample), and high adjusted savings representing 23% of Gross National Income (GNI), the seventh highest. But China still ranks 65th for carbon intensity though emissions per unit of GDP have declined by 38% since 2012, as manufacturing plays a lesser role to the profit of less carbon-intense services. In the Growth and Development pillar of the IDI, China ranks a remarkable 9th, thanks to a high level of employment, with over two-thirds of the population employed (20th among emerging economies), and relatively long health-adjusted life expectancy (68.5 years, sixth longest)[4].Summarizing the foregoing, we can conclude that in modern conditions, constant economic growth needs inclusive development. The Chinese government, understanding the challenges of the future and the global problems of mankind, has embarked on a course of internal development combined with the openness and innovativeness of the economy. This will ensure a long-term socio-economic effect - continuous economic growth, access to secondary and higher education, medicine, the formation of a strong middle class and an innovative nation.