Chinese Governance

The CCP has announced that it will aggressively move to reduce inequality in their society, going after the excess wealth of many of its newly minted billionaires.

China recognizes that the creation of thousands of tycoons, when most of the rest of society see very little benefit, is wrong and antithetical to good government.

This something that the body politic in the United States does not get, but it should:

China gave priority to economic growth for most of the past 40 years. Now, Xi Jinping is signaling plans to more assertively promote social equality, as he tries to solidify popular support for continued Communist Party rule.

The push is captured by a catchphrase, “common prosperity,” now appearing everywhere in China, including in public speeches, state-owned media and schools—and in comments from newly chastened business tycoons like Jack Ma.

Like many Communist party slogans, details remain vague. But officials and analysts who have tracked the phrase’s use say it is meant to convey the idea that leaders are returning to the party’s original ambitions to empower workers and the disadvantaged, and will limit gains of the capitalist class when necessary to address social inequities.

In a major meeting on financial and economic affairs Tuesday, President Xi described the wider goal of “common prosperity” as an “essential requirement of socialism.”

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The new policy priority is a factor in China’s recent clampdowns on powerful technology companies and other businesses whose growth and market clout are seen as contributing to social divides, experts and industry insiders say. The moves include fines for companies like Alibaba Group Holding Ltd. for antitrust failings, and a declaration that after-school tuition should become a not-for-profit industry to reduce families’ education costs.

The government’s messaging could also mean more rule changes are coming in areas such as healthcare, pensions and social welfare, they say.

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Unequal wealth distribution is now a major concern. While living standards have risen dramatically in China, the country’s Gini-coefficient, a measure of inequality, widened to 70.4 in 2020 from 59.9 in 2000, making China one of the world’s most unequal major economies, according to data from Credit Suisse.

This sort of proposal would be completely beyond the pale in the US, and that is a shame.

Every billionaire is a policy failure.