China’s Communist Party cements ‘common prosperity’ as core economic agenda
- Constitutional revisions also call for acceleration of the ‘dual circulation’ concept
- Decision comes as structural problems mount at home and headwinds gain strength abroad
The revisions came amid fierce debate about whether Beijing is leaning towards a more inward course and prepared to sacrifice some growth to counteract widening socioeconomic inequality as structural problems mount at home and headwinds gain strength abroad.
Although “common prosperity” was already in the charter, its context is expected be restructured to put fresh focus on the goal when the full text of the changes are made public.
Delivering his work report to more than 2,000 party delegates last Sunday, Xi ramped up his “common prosperity” rhetoric by speaking for the first time about tightening oversight of the way wealth is accumulated.
The response among analysts has been mixed, with some seeing it as “a warning signal” for the wealthy despite repeated denials from authorities that they will impose a Robin Hood-style tax.
The party’s new constitution has underscored the shared development of the non-public sector as a part of the “important pillar” of China’s economic system, with the public sector as the main body.
The constitutional revisions also call for acceleration of the “dual circulation” concept, which focuses on the domestic economy and promotes a positive interplay between internal and international economic flows.
A “more secure” development has been added to a long string of goals – which already consisted of “higher-quality, more efficient, equitable, and sustainable” – for the Chinese economy.
That was in line with Xi’s opening speech to congress a week ago, when he placed more emphasis on security and less stress on words like “reform” and “market”.
Liu Yuanchun, president of Shanghai University of Finance and Economics, said the fallout from the war in Ukraine had given a “profound” inspiration to the Chinese economy.
“Under the white-hot game of great powers, intensified geopolitical situation and the outbreak of wars, the internal circulation must be efficient and independent,” he said in an interview with government-affiliated China Newsweek on Wednesday.
Also echoing Xi’s report, the revised party constitution has added that the party should promote “high-quality development” and pursue “a Chinese path to modernisation”.
“Making these modifications will help to promote the unity of thought and action of the whole party in the scientific judgment of the party central on the situation at home and abroad and the strategic arrangements for the work of the party and the state,” the resolution said.
The changes also confirmed a two-step plan to build China into “a great modern socialist country” by the middle of the century.
Liu said Chinese-style modernisation meant that the Chinese economy would try to bid farewell to the extensive growth model and attach importance to broader fields of the economy.
In his work report, Xi said there were many bottlenecks hindering high-quality development and China’s capacity for scientific and technological innovation was not yet strong enough.
“Many major issues need to be resolved to guard against financial risks and ensure that food, energy, and industrial and supply chains are secure and reliable,” he said.
In a note on Friday, analysts with Anbound, an independent international think tank, said that after the congress the most crucial matter facing China would be development with the economy at its core.