Sustainable Development Pathways for Chinese Cities: An Assessment of the Advanced Inclusive Wealth Index

Abstract

The inclusive wealth index (IWI) is a stock metric proposed internationally in recent years to measure a region's sustainable development potential. To explore sustainability more comprehensively in this context, this paper improves the inclusive wealth (IW) system proposed by the United Nations Environment Programme by extending the definition of intangible capital and refining the classification of different types of capital. We then used the advanced IWI to investigate the changes in per capita IW and its capital composition in China's 10 National Sustainable Development Agenda Innovation Demonstration Zones from 2010 to 2019, and proposed sustainable development pathways for Chinese cities. Our results underline the fact that IW and capital structure across different types of cities is highly variable. The growth of IW per capita in Shenzhen, an international metropolis, mainly depends on advanced produced capital and intangible capital. For Ordos, however—a resource‐rich “energy city”—the per capita IW is driven by ordinary produced capital and restricted by non‐renewable natural capital, thus showing a low level of sustainability. Through its consideration of four kinds of capital, this study also points out the inequality of human capital between urban‐rural and male‐female groups, and demonstrates how increasing educational attainment helps to promote the transfer of human capital between regions and sectors. In general, a strong potential for sustainable development is linked to the promotion of highly educated human capital, advanced produced capital and intangible capital, while the ecosystem service value of natural capital is also key.