‘The time is now’: Xi Jinping calls on China to rally for common prosperity
- President expands on plans to reduce income inequality in article in Communist Party magazine
- Education, training and urbanisation cited as vehicles in the drive
“Only by promoting common prosperity, increasing the income of urban and rural residents and improving human capital can we increase overall productivity and consolidate the foundations for high-quality development,” Xi said in an article to be published in Communist Party journal Qiushi, or Seeking Truth, on Saturday.
“China must prevent polarisation, promote common prosperity and achieve social harmony and stability.”
The article is an excerpt of a speech Xi made in mid-August at a meeting of the party’s Central Committee for Financial and Economic Affairs.
It is the latest in a series of high-profile efforts by Xi to focus attention on what he described as a means to “properly deal with the relationship between efficiency and fairness”.
China’s coming era of ‘common prosperity’ – and what it means for the rich
The phrase “common prosperity” refers to material and cultural affluence that is shared by all, rather than the few.
Xi said the country should, step by step, aim to build an “olive-shaped” distribution pattern of wealth in which most of society was middle class.
He said Beijing would expand the ranks of this group by improving the lives of people at the lower end of the income spectrum through education, skills training and migration into urban areas.
He added that the salaries of grass-roots civil servants and workers of state-owned enterprises should also be raised.
Meanwhile, the government would strengthen regulations on the rich by reforming the tax system, restraining “unreasonable income” and clamping down on illicit gains, Xi said.
He said the country would “basically achieve common prosperity by around mid-century”, when the income and consumption gaps would be narrowed to a “reasonable range”.
But Xi also said the government should not make promises it could not meet and should avoid the “trap of welfarism” to support the lazy, given “the significant gap in development level between China and developed countries”.
China’s ‘common prosperity’ goal to evenly distribute wealth as Xi Jinping sets out stall for development
China’s living standards have risen during the past four decades of rapid economic growth but the wealth gap has also widened.
China’s Gini coefficient, a measure of income inequality, stood at 0.465 in 2019, according to official statistics. The coefficient ranges from 0 to 1, and the higher the reading the greater the inequality.
China’s wealth gap is close to the level of the United States, which recorded a reading of 0.48 in 2020, and much higher than Japan or South Korea.
A level of 0.4 is usually regarded as a red line for inequality
Rana Mitter, director of the University of Oxford China Centre, said that after witnessing decades of phenomenal growth there was clear resistance to the growing inequality in the country.
“This signals not only a desire to reduce economic inequality, but also an aim of trying to reduce other sorts of difference, including the expression of difference in gender, ethnic and linguistic preferences,” Mitter said.
He said the concept of common prosperity also suited Beijing’s aim to promote collectivism on the world stage.
“Right now, China is using economic arguments to stress the need for reducing inequality, but is using the same tactic to argue against individual choice on a range of identity issues including gender norms, language use and political opinions.
“Opponents will push back by pointing out that greater economic justice can go in hand with greater individual freedoms.”
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Ceren Ergenc, an associate professor in China studies at Xian Jiaotong-Liverpool University in Suzhou, said the fast-growing wealth gap was among the most important challenges for Xi’s leadership.
“There have been signs that the government is taking this issue seriously, such as the poverty alleviation campaign in rural China, and the outsourcing of social services provision, elderly care in particular, to social work organisations operating at the neighbourhood level in urban China,” Ergenc said.
“The goal of common prosperity as a social governance campaign is a further step to set the tone for the party plenum in November.”
But the goal did not mean a major shift in the economy from growth to welfare, Ergenc said.
“This is a partial intervention to alleviate the pressures on some of the disadvantaged segments of society, similar to previous ones since the Hu-Wen era, but perhaps more comprehensive than its predecessors, as it is Xi’s leadership style,” she said, referring to former president Hu Jintao and former premier Wen Jiabao.
“Growth is mentioned as a priority despite the fact that Xi’s climate goals might eventually require a degrowth strategy.”
