China returns to ‘common prosperity’

It was Mao Zedong who coined the term “common prosperity” as a term reflecting the Communist Party’s pursuit of an egalitarian society. The term faded away under party leader Deng Xiaoping, who shifted the focus to developing a Chinese economy in which “some people get rich first” and then general prosperity followed.

Currently, the richest 20 percent of Chinese earn ten times as much as the poorest 20 percent, a gap that has existed since 2015. China is one-third of its population, or about 400 million, of the middle class with annual household incomes between 100,000 and 500,000 yuan (13,150 to 65,750 euros). More than 600 million Chinese still have to make do with a monthly income of no more than 1,000 yuan (130 euros).

Last week, the government had already announced that it wanted to end the wealth gap. Tuesday’s top economic and financial affairs committee pledged, among other things, to “adjust reasonably high incomes” and encourage philanthropy. Members pledged to adopt “tax, social security and redistribution” policies and to tackle illegal and “unreasonable” incomes.

But the Communist Party favors the “incremental progress” approach. Last year, Xi pledged to make “more substantive progress in shared prosperity” by 2035.