China's common prosperity offers a development path for the world
Alessandro Golombiewski Teixeira
The opening ceremony of an art festival in Xing'an League, north China's Inner Mongolia Autonomous Region, August 8, 2022. /CFP
The opening ceremony of an art festival in Xing'an League, north China's Inner Mongolia Autonomous Region, August 8, 2022. /CFP

The opening ceremony of an art festival in Xing'an League, north China's Inner Mongolia Autonomous Region, August 8, 2022. /CFP

Editor's note: Alessandro Golombiewski Teixeira is a National Thousand Talent distinguished professor of public policy at the School of Public Policy and Management, Tsinghua University, and a professor of international business at Schwarzman College in Tsinghua. He is a former special economic advisor to the president of Brazil and a former Brazilian minister of tourism, and minister of development, industry and foreign trade. He was also president of the World Investment Association (WAIPA). The article reflects the author's opinions, and not necessarily those of CGTN.

Common prosperity has become one of the most important concepts guiding Chinese policy makers in recent years. In 2021, President Xi Jinping linked common prosperity to raising the income of low-income groups, promoting equity and fostering more balanced regional development, while emphasizing that development is a people-centered approach. This is a bold commitment for all Chinese and common prosperity will become an important feature of China's socialist modernization.

Common prosperity has long been a common pursuit of humanity and the issue of the gap between rich and poor has touched on the hearts of people all over the world. Both in the East and the West, countless people have made arduous explorations on the road to pursue common prosperity. However, instead of improving the gap between rich and poor, inequality is widening in many countries.

Under the influence of the pandemic, the global inequality crisis is further aggravated. According to the Federal Reserve's 2021 release on the distribution of wealth in the United States, for the first time since 1989, the total net worth of the top one percent of U.S. income households exceeds the combined wealth held by middle-class households, which accounts for 60 percent of the entire population. The poorest 20 percent of the world's population suffered the greatest loss of income from the pandemic.

China's proposal for common wealth, on the other hand, promises a fairer society, a larger and wealthier middle class, and businesses that will give back, not just take. The Communist Party of China, which is leading the process of reform and opening-up, as well as the socialist modernization, wants common wealth to be an effective model for the world, energizing the healthy development of a community of human destiny.

China has already accomplished the great achievement of eradicating poverty, but the distribution of social class structure is still in the shape of a pyramid, with more than 58 million low-income people at the bottom of the pyramid. By 2035, China's middle-income group will double its current size and the pyramidal structure would become an olive one. This goal, if achieved on schedule, will be an unprecedented feat in human history.

Since the reform and opening-up, China has become the world's second largest economy, the top manufacturing country, the top trading country in goods, the second-largest consumer of goods, the second-largest in-flow of foreign capital, and the world's top foreign exchange reserve for many years successively. All these aspects have laid a solid foundation for achieving common prosperity.

In fact, common prosperity, which meets the requirements of Chinese socialism for fairness and follows the basic laws of the modernization process of each country, is conducive to allowing the vitality of all labor, knowledge, technology, management and capital to burst forth competitively and step into a brand-new stage of development.

The Chinese government has implemented several measures to adjust income distribution and improve people's living standards. Beijing has imposed anti-monopoly measures on Internet platforms and prevented the disorderly expansion of capital. The core logic is to restrain the capriciousness of capital and allow ordinary people to enjoy the dividends of the Internet freely. The Chinese government has also increased its policy efforts in livelihood areas, such as de-capitalizing education, de-financializing real estate, and de-marketing healthcare. This can reduce people's burden in education, real estate, and healthcare, and to release more creative energy for society.

A bookstore in Qionghai, south China's Hainan Province, October 2, 2022. /CFP
A bookstore in Qionghai, south China's Hainan Province, October 2, 2022. /CFP

A bookstore in Qionghai, south China's Hainan Province, October 2, 2022. /CFP

Beijing should also consider the division between rich and poor at home in the context of the world wealth distribution system. As the world's largest trading nation in goods, China must optimize its tax structure and develop a scientific tax system to share globalized wealth as much as possible.

What's more, most measures related to common wealth both at home and abroad rely on fiscal tools and focus on distribution. The division between rich and poor originates from the uneven distribution of capital, and uneven distribution is only the result. China can start from the equity of the means of production and lay out the distribution of wealth at the stage of capital formation. China has to safeguard its assets and curb the tendency of capital to migrate to developed countries as soon as it is formed.

Additionally, the effect of narrowing the gap between rich and poor by expanding equal public services is far greater than by leveling the gap between individual incomes. Over the past 40 years, the fundamental problem with the growing divide between rich and poor in the world is not the gap in individual income, but the gap in social wealth created by public services. Therefore, the Chinese government has to ensure equal access to public services, which is the basis to achieve common wealth.

China's practice of pursuing common prosperity is of great global significance. If it succeeds, it will provide the world, especially the vast number of developing countries, with a choice of their own development path.

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