At the Financial and Economic Meeting on August 17, the Chairman of the PRC Si Jinpin stressed the need to support the idea of ”general prosperity” – moderate welfare for all. It is reported by CNBC.
According to Chinese media, the meeting sounded calls for “reasonable adjustment of excessive income” and “promotion of groups with high income and business to be closer to society.” Thus, the government will force the rich Chinese to pay more taxes, which will allow to resolve the inequality in income. The provision of “general prosperity” has become the main topic of political discussions in China in recent months. According to analysts, the idea is behind the latest regulatory measures against technological companies.
The term “common prosperity” usually understand moderate wealth for everyone, but so far it is rather a blurry slogan, often used by the Chinese government. Chief Economist The Economist Intelligence Unit Yue SU expects the authorities to begin to take concrete measures. She also noted that the Chinese government would not be able to completely ignore the impact of policies for the redistribution of wealth, taking into account the fact that the increase in taxes on high-income groups and capital gains can limit the investment and lead to their outflow abroad.
China’s income inequality has increased over the past few decades. According to estimates of the Professor of the Paris School of Economics of Thomas Picketti and his team, in 2015, 10 percent of the richest population received 41 percent of national income, compared with 27 percent in 1978. But low-income population has fallen up to about 15 percent compared with 27 percent in 1978. In 2021, the average income of Shanghai residents amounted to 7058 yuan (1090 dollars) per month, which is much higher than 4021 yuan ($ 620) for residents of other cities of the country and 1541 yuan ($ 238) for rural residents.
at the statement of the government, by the end of 2020 China won a complete victory over absolute poverty. Due to the features of poverty, all the poor population of rural areas was brought – 98.99 million people. Since 2013, China has invested in relevant changes in 246 billion dollars. This was the first step to fulfill the long-term obligations of the ruling Communist Party of China, which in July celebrated its 100th anniversary.