COMMON PROSPERITY

62OPINION Koh King KeeChina is committed to building a fairer societyBy Koh King Keeresident Xi Jinping

at the 10th meeting

of the CPC Central

Committee for

Financial and

Economic Affairs

held on August 17

stressed that “common

prosperity is an

essential requirement of socialism

and a key feature of Chinese-style

modernization.”The meeting called for “expanding

the proportion of middle-income

groups, increasing the income of

low-income groups, reasonably

adjusting high incomes, outlawing

illegal incomes, and forming an olive

distribution structure with large

middle and small ends.”In fact, in the early years after the

launch of the reform and opening-up policy, Deng Xiaoping put forward

the concept of “common prosperity.”

As he pointed out in 1985, “Getting

rich together will one day become

our core topic. Socialism is not about

the wealth for the minority and

poverty for the majority.” “Unlike

capitalism, a distinctive feature of

socialism is common prosperity

without polarization.” He even

warned, “Reform will fail if it leads to

polarization.”Deng believed that common

prosperity should be achieved

gradually, and it is necessary to

remove the conventional economic

straitjacket and to unleash and

develop the productive potential.

Therefore, he advocated letting

some regions with viable conditions

develop first and some people get rich

earlier than others, and they would

then help those lagging behind to

catch up, so as to eventually achieve

common prosperity. After 40 years

Pof reform and opening-up, China has

become the world’s second-largest

economy. In 2020, China’s GDP

exceeded 100 trillion yuan (US$15.53

trillion), but it has also caused income

inequality among the people and a

widening wealth ic Development Should

Benefit AllChina’s Gini coefficient jumped

from 0.20 before reform and opening-up to 0.46 in 2020, crossing the

internationally recognized “warning

line” of 0.4. Many people who became

rich in the early stage of reform and

opening-up did not actively help the

poor people and regions as expected.

Instead, they bought wineries and

enjoyed themselves overseas, or even

emigrated to foreign countries with

their income disparity brought about

by reform and opening-up is reflected

in the increasing concentration of

wealth, the widening gap between

urban and rural areas, and the

imbalance of regional ing to the National Bureau

of Statistics of China, the per capita

disposable income of urban residents

in China was 43,834 yuan (US$6,807)

in 2020, but that of rural residents

was 17,131 yuan (US$2,660), which

was only about 40 percent of the per

capita disposable income of the urban

residents. In the same year, Beijing’s

per capita GDP was about 164,909

yuan (US$25,610), 4.6 times that of

Gansu Province in northwest China,

which had the lowest per capita GDP

of 36,038 yuan (US$5,597).Economic development should not

just merely pursue GDP growth, but

should benefit all the people and take

into account the fair distribution of

wealth. Although income disparity

is a common phenomenon in many

countries, China, as a socialist

country, should not have such a

big gap between the rich and the

poor. Severe disparity in income is a

dangerous threat to social stability

and will lead to social unrest in the

long gap between urban and rural

areas leads to uneven distribution

of health services, housing and

education, while the hukou system

(registered permanent residency

which binds to local social welfare)

and imbalance regional development

hinder national unity and result in a

vicious cycle of social believed that socialism

should, and could avoid the problem

of the rich getting richer and the poor

becoming poorer. “It is conceivable

that by the end of this century when

the level of moderate prosperity is

reached, great emphasis should be

placed on raising and resolving this

problem,” he said prophetically in

y reduction is the necessary

route to achieve common prosperity.

China has eliminated absolute

poverty in 2020, laying the foundation

for common prosperity. The original

aspiration of the Communist Party

of China (CPC) is to seek happiness

for all people, not wealth for a few.

Therefore, common prosperity is a

reasonable extension of its policy after

the country has eradicated absolute

poverty and achieved a moderately

40%202043,834 yuan17,131 yuan20,00030,00040,00050,000010,000According to the National Bureau of Statistics of

China, the per capita disposable income of urban

residents in China was 43,834 yuan (US$6,807)

in 2020, but that of rural residents was 17,131 yuan

(US$2,660), which was only about 40 percent of the

per capita disposable income of the urban residents.

4.6 times36,038 yuan050,000100,000150,000200,000164,909 yuanIn the same year, Beijing’s per capita GDP was about

164,909 yuan (US$25,610), 4.6 times that of Gansu

Province in northwest China, which had the lowest

per capita GDP of 36,038 yuan (US$5,597).

OPINION63life is an important impetus driving

people’s enthusiasm. From a macro

perspective, raising the income of

low-income groups will be more

effective than restraining excessively

high income in promoting common

ly, e-commerce giant

Pinduoduo has pledged 10 billion

yuan (US$1.553 billion) to launch a

“10-billion-yuan agricultural research

project”, while Tencent and Alibaba

have pledged 50 billion yuan (US$7.765

billion) and 100 billion yuan (US$15.53

billion) respectively to charity in

response to the central government’s

enterprises should give back

to society, they also need profits and

capital to sustain healthy growth.

Therefore, donations to charity should

come more from the personal wealth

of the owners of the corporations,

rather than from the ’s regulation on Internet

and technology giants is aimed at

curbing the disorderly expansion

and wild growth of capital, and

creating a fairer and more reasonable

competitive environment, rather

than suppressing private enterprises

or excluding capital. China’s

economic growth depends on private

enterprises and the domestic market.

Reducing income disparity among

the people and achieving common

prosperity will help improve the

overall consumption capacity of the

people, expand domestic demand,

and promote the dual-circulation

prosperity is an important

connotation of the CPC’s original

aspiration to seek happiness for all

people, and it is based on the premise

of sustained economic growth.

Although China’s GDP is already 70

percent of that of the US, its per capita

GDP is only 16.5 percent of that of

the US. Therefore, China’s economic

growth potential is huge. Seeking

common prosperity will not lead to

common poverty, but will build a fairer

and more sustainable society.

About the author Koh King Kee is president of Centre

for New Inclusive Asia and president of ASEAN Research

Center for a Community with Shared Future, Malaysia. Girls from impoverished families appear happy to study at Baiyun Township Central

School of Guangxi Zhuang Autonomous Region. (HUANG XIAOBANG)

prosperous society in all aspects. It is

an inherent feature of socialism with

Chinese meeting also pointed out the

necessity “to correctly handle the

relationship between efficiency and

fairness, construct a coordinated

and supporting basic institutional

arrangement composed of the

primary distribution, redistribution

and third distribution, intensify the

adjusting ability of tax, social security

and transfer payments and improve

precision,” and “strengthen efforts

to regulate and adjust high incomes,

protect lawful incomes in accordance

with the law and adjust excessively

high incomes appropriately.” The

meeting also encouraged high-income groups and enterprises to

give more back to society by making

third distribution through voluntary

lization of the rural areas,

acceleration of urbanization,

abolishment of the hukou system,

providing equal education and training

opportunities, preferential university

entrance qualification for those living

in rural and underdeveloped areas,

popularization of modern technology

and e-commerce, providing high-quality education and medical services

to remote areas through the Internet

and other administrative measures will

all help to reduce social injustice and

narrow the wealth gap. Appropriate

tax policies, such as raising the

income tax for high earners, providing

inclusive social security and levying

estate duty, are also effective means

of redistribution to reduce income

ly, the Ministry of Education

of China issued the “double reduction”

policy to rectify off-campus tutorial

market. It is stipulated that all existing

tutorial organizations related to main

subjects are to register as non-profit

organizations and capitalization of

such tutorial organizations is strictly

prohibited. This policy reflects the

adjustment of China’s population

strategy. But more importantly,

its main objective is to eliminate

education inequality that has been

exacerbated by rampant off-campus

tutorial ng a Fairer and Sustainable

SocietyThe Chinese government needs

to strike a fine line in adjusting

high income. The definition of high

income cannot be one-size-fits-all as

the cost of living varies in different

cities and regions. Moreover, the

pursuit of better and higher material