Although inequality has been steadily declining since 2008, more can be done to address inequality, the report said, suggesting reforms of the intergovernmental fiscal system and the household registration system.

Other recommendations for China include a greater reliance on market mechanisms and mobilizing more private financing to boost green innovation and reduce environmental costs and waste.

The World Bank Group undertakes a Systematic Country Diagnostic for all its client countries to identify key challenges and opportunities in ending poverty and boosting shared prosperity. The Diagnostic forms the basis for the Country Partnership Framework, which determines the World Bank Group's activities in a country over a four to six year period.

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