China has given priority to economic growth for most of the last 40 years. Now, President Xi Jinping is pointing to plans to promote social equality more firmly, in an attempt to solidify popular support for the Communist Party’s ongoing rule.
This effort is worded with the slogan “popular prosperity”, which now appears everywhere in China, including public speeches, government.owned media and schools – and the words of businessmen like Jack Ma, who recently returned from a government education series.
Like many Communist Party slogans, the details are still vague. But officials and analysts who have followed the use of the phrase say it aims to convey the idea that leaders are returning to the party’s original aspirations – to strengthen workers and those who do not reach them, and to limit capital gains when social inequality needs to be addressed.
At an important meeting on economics and finance on Tuesday, President Shay described the broader goal of “popular prosperity” as “a fundamental demand of socialism.” , Was written by the Government News Agency Shinhua, in a quote from the official minutes of the meeting.
Speech by Chinese President Xi Jinping screened at centennial celebrations for Communist Party, late June / Photo: Associated Press, Ng Han Guan
Rebranding of the party
The priority of the new policy is part of China’s recent steps against powerful technology companies and other businesses whose growth and market power are seen as contributing to social divisions, say industry experts and secretaries. The measures include fines against companies like Alibaba for antitrust failures, and a declaration that the costs of after.school education need to go down and the field needs to pass to NGOs in order to lower the costs of education for families.
The messages from the government could also point to change in areas like health care, pensions and welfare, they said.
This push is based on previous declarations by Chinese leaders, who have tried to focus on the quality of growth while addressing the shortcomings of rapid development, such as environmental pollution. When Beijing unveiled a five.year plan in the midst of the corona crisis this year, it abandoned its long.standing tradition of setting a numerical target for gross domestic product, a sign that it seeks to reduce the emphasis on growth for growth.
“Xi Jinping seeks to rebrand the image of the Communist Party at home and abroad” by narrowing the income gap and moving to higher quality development, said Bill Bickels, a former senior UN economist stationed in China. By taking care of the entire population. “
The way wealth is distributed has always preoccupied the party, although its views on the issue have changed over the years. Mao Zedong once labeled capitalists as the enemies of the Chinese people. In the 1980s, Deng Xiaoping said it was okay to “let some people get rich first” while China adopted market reforms, although he also stressed the need for wealth to eventually be distributed equally among the population.
Unequal capital distribution is currently a major source of concern. While living conditions in China have risen dramatically, the Gini index, which measures inequality, rose to 70.4 in 2020 from 59.9 in 2000, making China one of the largest inequality economies, according to Credit Suisse.
Prime Minister Li Qiqiang caused a scandal last year when he revealed that more than 600 million people, or more than 40% of China’s population, earn less than $ 140 a month, while many Chinese complain about the power of rich tycoons.
Centennial Celebrations for the Communist Party of China / Photo: Associated Press, Ng Han Guan
The “Popular Prosperity” program is underway
Although the phrase “popular prosperity” is not new, it began to appear much more after China announced last year that it had managed to eradicate extreme poverty and reached its long.standing goal of being what is called a “reasonably prosperous society.“
In a February speech celebrating this achievement, President Xi emphasized the achievement of “popular prosperity” as the next step in China’s development.
Around this time, Jack Ma, co.founder of Alibaba and finance giant Annette Group, appeared in public for the first time since the government blocked Annette’s anticipated IPO, saying it was the developers’ responsibility to “work hard for rural renewal and popular prosperity.“
Jack Ma / Photo: Associated Press, Markus Schreiber
In June, President Xi chose Eastern Zhejiang Province, where he had once been governor, as the pilot district for the “People’s Prosperity” program. Under the plan, the province aims to raise the per capita income to 75,000 yuan, equivalent to $ 11.6,000, by 2025, from about 52,000 yuan by 2020.
The program also promises to reduce the gap between rich and poor and reform revenue allocation by making changes to “very high incomes,” punitive actions against illegal profits and encouraging business people to increase their philanthropy efforts.
Yuan Jiajun, party leader in Zhejiang, said the province is trying to show the rest of the country that gaps between different provinces and people’s incomes can be reduced. He also tried to reassure the business community that the plan was not intended to “kill the rich and help the poor,” according to quotes from his state media.
Chinese investment bankers, bloggers and entrepreneurs have focused on the issue of “popular prosperity” and sought to explain its implications.
In a 50.page report released earlier this month, Morgan Stanley economists noted that the new Chinese emphasis on “getting rich together” or “popular prosperity” will likely be reflected in additional regulatory spirits for companies in areas related to rising social inequality, and more support for public health and green energy businesses –
“Compared to what it was just five years ago, the Chinese leadership is paying more attention to social equality,” said Larry Ho, chief economist at China’s Macquarie Group. In addition to punitive measures against tech companies like Annette Group, which regulators accuse of enticing young people to get into debt, Oh said Beijing’s priorities now include shifting more financial support to poor areas and lowering housing prices.
Gaming and communications company Tencent Holdings announced in April that it would spend $ 7.7 billion on healing the company’s ills and removing China’s rural areas from the cycle of poverty. More recently, founder Maitouan Wang Xing has donated $ 2.3 billion from the Chinese food delivery giant to a foundation he runs to fund education and scientific development.
On Wednesday, Tencent, after posting net income for the same quarter to $ 6.57 billion, announced it would contribute another $ 7.7 billion to promote “public prosperity” projects, including public health and education. “This new Tencent strategy is also a positive response to the national strategy,” the company said in a statement.
“Calm the public”
President Shay had already considered moving beyond a greater emphasis on social equality before coming to power in 2012, when a once.a.decade struggle for power in the party entered its final days, people familiar with the thinking said.
This debate has gained public expression through talk of cake, a metaphor for China’s wealth, the people said. Some senior officials have argued that the cake should first be enlarged and then divided. Others, like Bo Shilai, the leader of the Chongqing party who was seen as a candidate for a higher post before being sentenced to life in prison for corruption and abuse of authority, insisted on first dividing the pie more equitably and then increasing it.
President Shai, who was vice president at the time, disagreed with neither of them, the people said. He said his goal was to both enlarge the cake and distribute it equally and one does not contradict the other.
More recently, China’s relatively strong recovery from the corona plague has given the country’s leadership more flexibility in its long journey to achieve its social goals, after addressing other priorities such as corruption, experts say.
The end of Shay’s second term – and his expected attempt to get a third term next year – may give a boost to the effort to achieve “popular prosperity”, especially now that growth is starting to slow down. “Shay hopes to reassure the public when the economy slows and intends to express concern for people’s livelihoods,” said Dorothy Zollinger, a professor of political science at the University of California, Irvine. But “there are still many poor people in China who are left behind and will continue to be left behind.“