China risks ‘common poverty’ if Beijing excessively intervenes in market, economist warns
- President Xi Jinping has turned the spotlight back onto China’s widening wealth gap, but prominent pro-market economists say government overreach could backfire
- And as Beijing cracks down on monopolistic tech companies, analysts urge the central government to focus on fixing problems with state-owned enterprises
Some of China’s most influential – and critical – economists are suggesting that President Xi Jinping’s renewed emphasis on “common prosperity” should advance via market-oriented reforms, adding that such efforts could backfire if the government takes a heavy-handed and invasive approach when implementing them.
They also warn that mounting an all-out offensive against rich businesspeople, or even adopting a commandeering style of market crackdowns – in the pursuit of more balanced wealth distribution – could stifle both income and the creation of new jobs.
“If we lose faith in market forces and rely on frequent government intervention, it will lead to common poverty,” Zhang Weiying, an outspoken economics professor at Peking University, argued in an article published this week on the website of the Chinese Economists 50 Forum, a private academic organisation for public interests.
Instead, Zhang and others say more support needs to be given to the private sector, while Beijing’s anti-monopoly efforts must be recalibrated – by first turning them inward toward state-owned enterprises.