President Xi Jinping issued a warning to China's wealthiest citizens on Tuesday, outlining a plan for "shared prosperity" that involves income restriction and redistribution.
The administration unveiled fresh plans to target the highest levels during a meeting of the Communist Party's Central Committee for Financial and Economic Affairs. According to a report of the meeting released by state media Xinhua, officials pledged to strengthen the regulation and adjustment of high income, protect legal income, fairly adjust excessive income, and encourage high-income groups and companies to contribute back to society more.
Significant phrase and promise to make more people wealthy
Simultaneously, officials committed to increase the number of the middle-income group, increase low-income group wages, and prevent illicit revenue to achieve social fairness and justice. It also reinforced Deng Xiaoping's famous remarks, "let some people get rich first," while also promising to create an atmosphere in which more people can become wealthy.
Officials pledged to make it easier for people to further their education and advance in their careers, NDTV reported. They also advocated for enhancing housing supply, elderly care, and the medical system to promote fair access to public services.
The meeting also emphasized the importance of reducing financial risks. According to Xinhua, efforts should be made to find a balance between providing stable economic growth and avoiding financial dangers.
Per SCMP, the speech drew attention from China watchers because it came after Chinese leaders emerged from a two-week disappearance from public view, apparently to arrange at the seaside retreat of Beidaihe, and because it was formally addressed as a policy for the first time after being discussed informally in the past. It was also delivered at a time when Beijing has launched unprecedented crackdowns on several sectors of the economy, including online education, technology, and real estate, to address expanding income disparities, rising debt levels, and slowed consumption.
Plan examples provided at the conference included favorable changes in taxes and social security payments for middle-income workers, more policies that raise wages for individuals in low-income groups, and crackdowns on practices and loopholes that could lead to "illicit revenue."
China grew as one of the world's most powerful country
Xi Jinping also asked for property and intellectual property rights to be protected. But shared prosperity isn't limited to financial markets; it also encompasses the spiritual and cultural lives of society. It needs to be expanded to rural and urban areas, with rural infrastructure and living circumstances, in particular, needing to be upgraded.
Policymakers at the meeting agreed that all levels of government, including local governments, must work together to develop policies to accomplish the aim of common prosperity.
China has grown from a poor country to the world's second-largest economy and one of the world's most powerful in industry and technology. Its strong expansion may enable it to overtake the United States as the world's largest economy within the next decade.
However, as China's private sector and wealth have exploded - in 2019, the number of wealthy Chinese topped that of wealthy Americans for the first time - disparities between affluent and poor, as well as rural and urban residents, have worsened.
Xi appears to be troubled by this issue. He stated that the Party "allowed some people, some areas to get rich first" as a result of its 1970s economic reforms. The Chinese President's emphasis on wealth redistribution is in line with his government's larger economic objectives.
In recent months, the country has launched an unprecedented crackdown on technology, banking, education, and other industries for the sake of mitigating financial risk, safeguarding the economy, and combating corruption. His government has also stated that it must preserve national security and the interests of its citizens. Regulators have widely accused the private sector of causing socio-economic issues that could destabilize society and threaten the Party's control, as per CNN via MSN.