China’s common prosperity push does not mean ‘killing the rich’, official says
- President Xi Jinping’s rhetoric on common prosperity, which calls for the people to share in the opportunity to be wealthy, has surged this year
- Notion of common prosperity dates back to the 1950s and Mao Zedong, before fellow former leader Deng Xiaoping repeatedly mentioned the idea in the 1980s
China’s push for “common prosperity”, as President Xi Jinping aims to decrease inequality in the world’s second-largest economy, does not mean “killing the rich to help the poor”, a ruling Communist Party official said on Thursday.
China must also “guard against falling into the trap of welfarism”, Han Wenxiu, an official at the central financial and economic affairs commission, said at a briefing in Beijing.
Those who “get rich first” should help those behind, but hard work should be encouraged, he said.
“We cannot wait for help, rely on others for help, or beg for help. We cannot support layabouts.”
China has said it will protect legal income but “rationally adjust excessively high” incomes, according to a meeting chaired by Xi earlier this month. High income groups and firms are also being encouraged to contribute more to society.
Charitable giving should be incentivised through taxation policy and can improve the “distribution structure”, Han said. Donations are “not compulsory”, he added.
The policy shift comes amid rising scrutiny and regulatory crackdowns directed toward big business, particularly China’s giant tech firms.
Investors believe a major shift is underway in China as the government aggressively pursues reform aimed at cutting cost-of-living pressures at the expense of businesses.
Recent policies to rectify and regulate internet platforms are aimed at irregularities and illegal behaviour, and are “absolutely” not aimed at private companies or foreign companies, stressed Han.
Source: Reuters