Editor's note: John Gong, PhD, is a professor at the University of International Business and Economics and a research fellow at the Academy of China Open Economy Studies at the University of International Business and Economics (UIBE). The article reflects the author's views and not necessarily those of CGTN. 

At the Communist Party of China's (CPC) centennial anniversary celebration a few days ago, Chinese President Xi Jinping proudly declared that China had achieved its first centennial goal of establishing what is called a "moderately prosperous society" (Xiaokang). Many foreign friends don't quite understand what the big deal is about this cryptic term "moderately prosperous society," so this op-ed piece is intended to put things in perspective.

The Mandarin Chinese term for "moderately prosperous" appeared as early as 3,000 years ago in Classic of Poetry, which literally means leading a life in peace and comfort. Peace is self-explanatory. Comfort is of course a moving target as a function of the evolution of living standards in human history. For example, economic historians normally consider access to a basket of five basic food sources – bread, meat, vegetables, olive oil and wine – as constituting a decent lifestyle of meeting daily necessities in medieval times. Today we need many more things to claim a life with comfort. 

The "moderately prosperous" concept was first proposed by the late leader Deng Xiaoping in 1979 at a diplomatic event when meeting with the then visiting Japanese prime minister, and again as a moving target, the term has gone through several rounds of dress-ups as part of the government's stated development goal in the CPC's official documents.  

The last time this goal was formalized and also expressed in a sort of quantitative manner was at the 18th National Congress of the CPC in 2012, where it stated that by 2020, the GDP and the national income per capita, among other things, should be doubled compared to the 2010 level. These other things indicate goals beyond just economic development, for example in areas of education, culture, innovation, science and technology, and more importantly also including a social equity agenda, which the original Mandarin Chinese of "moderately prosperous" in itself connotes. President Xi's poverty alleviation campaign is very much a reflection of that agenda. Today China has totally eliminated abject poverty.  

Now let's look at how thing have been going in the past 10 years compared to 2010. According to the World Bank data, China's nominal GDP per capita increased from $4,550 U.S. in 2010 to $10,500 in 2020, an average annualized growth rate of 8.7 percent. Even setting aside the inflation and dollar depreciation factors, that is still an incredible feat by any means. With yet significant RMB appreciation vis-à-vis the dollar and still stellar economic performance amid the global COVID-19 pandemic this year, China's nominal per capita GDP figure will see another big leap, probably within striking distance to the World Bank's high income country category threshold at a bit over $12,000 U.S. 

But probably the more significant aspect of the "moderately prosperous" concept's achievement lies in the structural change of the economy, particularly as related to the digital economy. According to a research institute associated with the Ministry of Industry and Information Technology (MIIT), the size of China's digital economy had reached 36.2 percent by 2019, growing at above 15 percent annually, which is double the speed of GDP growth in the same year. It has also created about 200 million jobs so far, meaning one out of every five jobs in today's China is associated with the digital economy.  

During the Party centennial speech on July 1, President Xi said China is currently embarking on a journey to fully build a modern socialist country with "common prosperity." What is common prosperity? Like its predecessor, it is likely to be a moving target to be continually refined in future CPC congresses. But one thing is sure, that the word "common" here indicates an even more pronounced and explicit social equity political agenda than the "moderately prosperous" concept. That is one defining characteristic that sets apart China's economic development model from that of many Western countries of so-called liberal democracy.   

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