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Ancient Use 
It has been loosely translated as a "basically well-off" society in which the people are able to live relatively comfortably, albeit ordinarily. The term was first used in Classic of Poetry written as early as 3000 years ago. Xiaokang may be associated with an Engel's coefficient of 40% - 50%.
Modern Use 
Chinese leader Deng Xiaoping used the terms Xiaokang society in 1979 as the eventual goal of Chinese modernization.
The vision of a xiaokang society is one in which most people are moderately well off and middle class, and in which economic prosperity is sufficient to move most of the population in mainland China into comfortable means, but in which economic advancement is not the sole focus of society. Explicitly incorporated into the concept of a Xiaokang society is the idea that economic growth needs to be balanced with sometimes conflicting goals of social equality and environmental protection.
The current usage of the term also invokes ancient Chinese thought in support of modern Chinese Marxism. In ancient Chinese writing a xiaokang society was the predecessor to the great unity. There is a rough correspondence between this progression and the progression in Chinese Marxism between a market socialist society and world communism.
The revival of the concept of a Xiaokang Society was in part a criticism of social trends in mainland China in the 1990s under Jiang Zemin, in which many in China felt was focusing too much on the newly rich and not enough on mainland China's rural poor. Furthermore there has been a fear in some circles that Chinese society has become too materialistic placing material wealth above all other social needs.
In contrast to previous concepts such as the spiritual civilization and the campaigns against bourgeois liberalization in the 1980s, the concept of the Xiaokang society does not involve heroic self-sacrifice and does not place the material and the spiritual in opposition. The vision of a Xiaokang society sees the need for economic growth to provide prosperity, but it sees the need for this prosperity to be broadly distributed.
In addition, the concept of a Xiaokang society is the first time in which the Communist Party of China has used a classical Chinese concept to legitimize its vision for the future of China. Its recent use has been associated with Hu Jintao and Wen Jiabao as a goal for mainland China to reach by the year 2020.
Xiaokang is also a name for a semi-monthly magazine that is affiliated to the Qiushi Magazine, the party-run magazine in Beijing. Started in 2004, it mainly focuses on the political and economic development in China. Referred to itself as "Insight China", Xiaokang defines itself as a magazine that voices public opinions and discuss the current affairs regarding the Chinese Politics and social cultures.