Explainer: What is China's 'common prosperity' drive and why does it matter?
September 2, 2021 2:42 PM +08
Last Updated 7 days ago
 |
| A view of the city skyline from the Shanghai Financial Center building, October 25, 2011. REUTERS/Carlos Barria |
BEIJING, Sept 2 (Reuters) - President Xi Jinping has called for China to achieve "common prosperity", seeking to narrow a yawning wealth gap that threatens the country's economic ascent and the legitimacy of Communist Party rule.
"Common prosperity" as an idea is not new in China, but a sharp escalation in official rhetoric and a crackdown on excesses in industries including technology and private tuition has rattled investors in the world's second-largest economy.
Xi, poised to begin a third term in 2022, is turning towards inequality after concluding a campaign to eliminate absolute poverty, pledging to make "solid progress" towards common prosperity by 2035 and "basically achieve" the goal by 2050.
WHAT DOES 'COMMON PROSPERITY' MEAN?
"Common prosperity" was first mentioned in the 1950s by Mao Zedong, founding leader of what was then an impoverished country, and repeated in the 1980s by Deng Xiaoping, who modernised an economy devastated by the Cultural Revolution.
Deng said that allowing some people and regions to get rich first would speed up economic growth and help achieve the ultimate goal of common prosperity.
China became an economic powerhouse under a hybrid policy of "socialism with Chinese characteristics", but it also deepened inequality, especially between urban and rural areas, a divide that threatens social stability.
The push for common prosperity has encompassed policies ranging from curbing tax evasion and limits on the hours that tech sector employees can work to bans on for-profit tutoring in core school subjects and strict limits on the time minors can spend playing video games. read more
This year, Xi has signalled a heightened commitment to delivering common prosperity, emphasising it is not just an economic objective but core to the party's governing foundation.
Officials say that common prosperity is not egalitarianism.
A senior party official said last month that "common prosperity" does not mean "killing the rich to help the poor". read more
A pilot programme in Zhejiang province, one of China's wealthiest, is designed to narrow the income gap there by 2025.
HOW WILL IT BE ACHIEVED?
Chinese leaders have pledged to use taxation and other income redistribution levers to expand the proportion of middle-income citizens, boost incomes of the poor, "rationally adjust excessive incomes", and ban illegal incomes.
Beijing has explicitly encouraged high-income firms and individuals to contribute more to society via the so-called "third distribution", which refers to charity and donations.
Several tech industry heavyweights have announced major charitable donations and support for disaster relief efforts. Online gaming giant Tencent Holdings (0700.HK) has said it will spend 100 billion yuan ($15.47 billion) on common prosperity.
Long-discussed reforms such as implementing property and inheritance taxes to tackle the wealth gap could gain new impetus, but policy insiders believe such changes are years off.
A property tax has been discussed for years and two pilots have been implemented in Shanghai and Chongqing since 2011, but little progress has been made.
Other measures would include improving public services and social safety net.
WHAT WILL BE THE ECONOMIC IMPACT?
Chinese leaders are likely to tread cautiously so as not to derail a private sector that has been a vital engine of growth and jobs, analysts said.
The common prosperity goal may speed China's economic rebalancing towards consumption driven growth to reduce reliance on exports and investment, but policies could prove damaging to growth driven by the private sector, analysts say.
Increasing incomes and improved public services, especially in rural areas, would be positive for consumption, and a better social safety net would lower precautionary savings.
The effort supports Xi's "dual circulation" strategy for economic development, under which China aims to spur domestic demand, innovation and self-reliance, propelled by tensions with the United States.
($1 = 6.4622 Chinese yuan renminbi)
Reporting by Kevin Yao; Editing by Michael Perry
https://www.reuters.com/world/china/what-is-chinas-common-prosperity-drive-why-does-it-matter-2021-09-02/
Web results
6 days ago — SHANGHAI, Sept 2 (Reuters) - China's Alibaba Group (9988.HK), will invest 100 billion yuan ($15.5 billion) by 2025 in support of "common ...
26 Aug 2021 — BEIJING, Aug 26 (Reuters) - China's drive for "common prosperity", as President Xi Jinping aims to ease inequality in the world's ...
5 days ago — President Xi Jinping's "common prosperity" is turning into a ... HK) have each pledged $15.5 billion to the Chinese president's cause to ...
25 Aug 2021 — Viewsroom: China's push for common prosperity ... Reuters Breakingviews is the world's leading source of agenda-setting financial insight.
6 days ago — SHANGHAI, Sept 2 (Reuters) - Chinese e-commerce giant Alibaba Group 9988.HK, BABA.N will invest 100 billion yuan ($15.5 billion) by 2025 in ...
6 days ago — Reuters. NAOKI MATSUDA and IORI KAWATE, Nikkei staff writers September ... The common prosperity drive marks a major policy shift for China.
13 hours ago — In a country that regularly censors opposing viewpoints, Chinese President Xi Jinping's push for “common prosperity” has triggered something ...
22 hours ago — Chinese tech giants including Alibaba and Tencent pledge billions of dollars to support President Xi Jinping's "common prosperity" campaign.
5 days ago — Move comes on back of Beijing encouraging firms to share wealth as part of a drive to ease inequality.
6 days ago — Reuters. @Reuters. Explainer: What is China's 'common prosperity' drive and why does it matter? http://reut.rs/3gRmmlp.
5 days ago — China's Alibaba will invest $15.5 billion by 2025 in support of China's 'common prosperity.' It is the latest corporate giant to pledge ...
5 days ago — Alibaba joins a chorus of technology giants pouring money into President Xi Jinping's goal of "common prosperity" as the sector faces ...
2 days ago — President Xi Jinping has called for China to achieve "common prosperity", seeking to narrow a yawning wealth gap that threatens the ...
Listen to discovery playlists featuring Viewsroom: China's push for common prosperity by Reuters on desktop and mobile.
1 day ago — As the country's leader prepares for a likely third term, he is promising “common prosperity” to lift farmers and working families into the ...
26 Aug 2021 — The Chinese President Xi Jinping has masterminded a major policy shift for ... Common prosperity has also been cited by Xi and his fellow ...
5 days ago — Photo: tingshu wang/Reuters ... President Xi Jinping has used the common-prosperity initiative to reflect China's heightened focus on social ...
25 Aug 2021 — BEIJING (Reuters) - China's push for "common prosperity", as President Xi Jinping aims to decrease inequality ...
26 Aug 2021 — “common prosperity”,. as President Xi Jinping aims to decrease inequality in the world's second-largest economy, does not mean “killing the rich ...
20 Aug 2021 — News of Chinese president Xi Jinping's crackdown on wealth inequality ... He emphasized the need for “common prosperity” while promoting ...
Yawen joined Reuters Breakingviews in Hong Kong in September 2020. Previously, she spent four years covering China's economy for Reuters in Beijing, ...
China's 'common prosperity' push does not mean 'killing the rich,' official says. Aug 26, 2021 8:44 PM PHT. Reuters. image. CHINESE ECONOMY.
5 hours ago — Photo: Carlos Barria, Reuters. (AF) The regulatory crackdowns triggered by Chinese President Xi Jinping's drive for ”common prosperity” have ...
6 days ago — By Brenda Goh. SHANGHAI (Reuters) -China's Alibaba Group will invest 100 billion yuan ($15.5 billion) by 2025 in support of “common ...
27 Aug 2021 — Gabriel Crossley (Reuters) (The Jakarta Post) ... China's drive for "common prosperity", as President Xi Jinping aims to ease inequality in ...
26 Aug 2021 — BEIJING (Reuters) - China's push for "common prosperity", as President Xi Jinping aims to decrease inequality ...
26 Aug 2021 — By Gabriel Crossley. BEIJING (Reuters) -China's drive for “common prosperity”, as President Xi Jinping aims to ease inequality in the ...
19 hours ago — Accepting common prosperity: the latest in Chinese equity markets. Many investors seem to have forgotten that China equities have arguably ...
A Reuters report commented that “the member states in APEC expect China to show its leadership while the Western countries are engaged in counter-globalization ...
18 Aug 2021 — 17), Xi said he wanted to restrain “unreasonable income,” raise wages, and grow the middle class, per a Reuters report. Xi emphasized the need ...
18 Aug 2021 — REUTERS. PRESIDENT XI JINPING put China's wealthiest citizens on notice Tuesday, offering an outline for “common prosperity” that includes ...
