Abstract: Achieving common prosperity for all the Chinese people is one of the five defining characteristics of Chinese modernization. Optimizing the income distribution structure and developing a large middle-income group are crucial means to achieve this goal. Utilizing data from the Chinese Social Survey (CSS) and applying the National Bureau of Statistics' standard for middle-income households, this study reveals through statistical analysis that between 2005 and 2022, the share of low-income residents in China decreased significantly from 91.50% to 35.94%, lifting approximately 690 million people out of low-income status. Concurrently, the proportion of the middle-income group surged from 1.08% to 25.51%, expanding its size from around 14 million to 400 million people. Over the nearly two decades, China's income distribution structure has undergone a fundamental transformation, evolving from an "inverted T-shape" to a "pyramid shape, " with the preliminary formation of an "olive-shaped" structure—commonly known as a diamond-shaped structure—becoming increasingly evident. In the next phase, optimizing the income distribution structure should further promote integrated urban-rural development and coordinated regional development. Targeted policy measures should be implemented to facilitate the large-scale entry of the lower-middle-income group into the middle-income bracket, steadily achieving the milestone goal of establishing the middle-income group as the largest segment nationwide.