President Xi stresses common prosperity amid high-quality development . . .
China’s top economic policymakers met on Tuesday at the 10th meeting of the Central Committee for Financial and Economic Affairs (CCFEA), chaired by President Xi Jinping. Xi underscored the notion of “common prosperity” being a fundamental requirement of socialism and the need to balance growth and financial stability. The CCFEA called for the strengthening of a “three-tier income distribution system” that seeks to “reasonably adjust excessive incomes” and encourage high-income individuals and businesses to “give back more to the society.”
Rising concerns about inequality . . .
The Chinese Communist Party’s (CCP) idea of ‘common prosperity’ and ‘moderate wealth for all’ can be traced back to the 1970s and 1980s. However, the CCP’s use of the terms now likely signals a shift from the previous decades’ economic development philosophy of letting some people and regions ‘get rich first.’ It could also be an attempt to address the growing social and economic challenges posed by the country’s widening income gaps. China’s richest 10 per cent account for 40 per cent of national income, and the top 20 per cent earn 10 times more than the bottom 20 per cent. Sustaining growth and equalizing access to resources appears to be a priority for the CCP, as it enters its second centenary.
More concrete measures to come . . .
This policy discussion followed Beijing’s unprecedented crackdowns on the technology, real estate, and online education industries over the past months, which it believes to have contributed to the rising debt levels, unequal access to opportunities, and the creation of several ultra-rich individuals. Tech giant Tencent has responded quickly by announcing a C$10 billion “common prosperity special project” fund to help boost rural incomes and healthcare systems. It is also expected that tax reforms, including pushing forward the long-absent real estate and inheritance taxes, will move towards a more favourable direction for the lower and middle-income groups.
- China Neican: Towards “common prosperity”
- South China Morning Post: China’s ‘common prosperity’ goal to evenly distribute wealth
- 中国经济网: 中央提“三次分配”，怎么看？怎么干？