The government must implement social policies to narrow social inequality in the next five years. Photo: Beijing
Source:
https://scmp.com/news/china/policies-politics/article/1874792/mind-gap-narrowing-income-divide-key-realising-xi Politics
Mind the gap: narrowing income divide key to realising Xi Jinping's 'Chinese dream'
The government must narrow the divide in living standards over the next five years if it is to realise the president's main political agenda
Xi Jinping's Chinese dream aims in part to "reclaim national pride" and improve personal well-being. Photo: AP
President Xi Jinping's main political agenda to realise the "Chinese dream" will be at stake if his government fails to implement his social policy to narrow social inequality in the next five years, according to analysts.
In a document released late last week on the draft 13th five-year plan, the Communist Party's leadership said the focus would be on increasing overall living standards and promoting social welfare.
Economists said the policy was an effort to develop a consumption-driven economy, which until recently had relied heavily on the unsustainable model of state-led capital investment and exports to drive growth.
"It is the biggest campaign to promote social equality and narrow the income gap since the start of reforms in the early 1980s," said Ma Guoxian, a political economist at Shanghai University of Finance and Economics.
Ma said the campaign would be a crucial effort by Xi who had put social equality before economic growth in his political agenda.
"President Xi's whole political agenda of the Chinese dream and his legacy will entirely based on whether the government can successfully implement his social policy," Ma said.
Huang Wenzheng, a demographer and visiting scholar at Peking University's Guanghua School of Management, said the campaign was also an effort to transform the economy away from its over-reliance on state-led infrastructure investment and exports to one mainly driven by domestic consumption.
"Through improving social security and promoting social welfare, the government hopes to boost private consumption so that people have to save less and can spend more," Huang said.
Wang Tao, chief China economist at UBS Securities Asia, said the new five-year plan would target an increase in consumption's share of GDP, supported by policies to promote employment and wage growth, expand social welfare, and further develop the services sector.
Decades of capitalistic market economic reforms have resulted in a high degree of income inequality. Xi's Chinese dream aims in part to redress this with its overall goals of "reclaiming national pride" and improving personal well-being.
In a communiqué released after last week's closed-door gathering of the party's Central Committee, leaders said the main focus of the next five-year plan would be to promote the overall development of the people and improve social welfare.
The plan runs from next year until 2020, when leaders also aim to have doubled the size of the country's GDP and per capita income from 2010 levels in its push to make China a "relatively prosperous society".
Wang said the new five-year plan appeared to put greater emphasis on equality, poverty reduction and social welfare, with its targets to lift 70 million people out of poverty by 2020.
The party hopes to achieve this with a better minimum wage system, free secondary education for poor children and an expanded social safety net, including expanding pension and serious illness insurance coverage to the whole population.