China’s recent economic transformation has brought prosperity but also challenges in addressing inequality. To counter disparities, the government expanded its role in the economy and invested in social welfare. Education reforms ensured nine years of compulsory schooling, expanded higher education enrolment tenfold and strengthened vocational training. Healthcare coverage went from limited access in the early 2000s to near-universal insurance by 2024, while pension schemes now cover over 95 per cent of the population. Between 2010 and 2014, public spending on education, healthcare and pensions more than doubled, narrowing gaps across income groups. The most significant progress occurred in pensions, where rural and unemployed residents gained new protections, sharply reducing inequality. Nevertheless, disparities remain; wealthier groups still benefit disproportionately, especially with regard to healthcare and pensions, and regional differences persist in education funding. Intergenerational imbalances remain a concern, with older persons receiving nearly double the transfers of children. Overall, China’s welfare expansion has reduced inequality across income groups yet still faces challenges in terms of population ageing, fragmented systems and uneven distribution. This underscores the need for continued reform in order ensure greater equity and sustainability.