In news– Recently, the President of China, 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.
About ‘Common prosperity’-
- “Common prosperity” was first mentioned in the 1950s by Mao Zedong, founding leader of what was then an impoverished China, 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.
Current commitment to common prosperity drive
- Xi Jinping, 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.
- 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.
- A pilot programme in Zhejiang province, one of China’s wealthiest, is designed to narrow the income gap there by 2025.
- 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.
- The government 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.
- Long-discussed reforms such as implementing property and inheritance taxes to tackle the wealth gap could gain new impetus.
- Other measures would include improving public services and social safety net.