China's solution to achieve common prosperity

Editor's note: The Communist Party of China will convene the third plenary session of its 20th Central Committee from July 15 to July 18 in Beijing to discuss the issue of further comprehensively deepening reform and advancing Chinese modernization. Reform and opening-up constitute China's second revolution, a monumental journey of development and progress for both China and the world. This process has profoundly transformed China and significantly impacted the global landscape. CGTN First Voice has put together a six-part series "To a Brighter Future: China's Reform and Opening Up in New Era" to delve into China's achievements in economic, political, social and ecological domains since the reform and opening-up period, exploring the directions and measures for China's continued comprehensive furthering of reform.

Since adopting the reform and opening-up policy in 1978, especially since the 18th National Congress of the Communist Party of China (CPC) in 2012, China has vigorously pursued social reforms, actively promoted employment and entrepreneurship, narrowed the wealth gap, and established the world's largest social security system. It has created a miracle of unprecedented economic development and long-term social stability. These achievements are not only significant milestones of modernization with Chinese characteristics but also lay a solid social foundation for its realization.

The city of Jinjiang in Fujian Province, southeast China, mirrors China's rapid economic growth and significant improvements in people's well-being. Before 1978, Jinjiang was an impoverished agricultural county with scarce land and resources. However, the reform era saw Jinjiang leveraging its position as a hub for overseas Chinese, using its internal drive to explore a unique path to industrialization, urbanization and modernization, creating what is now known as the "Jinjiang experience" of county-level modernization.

Over the past 40 years, Jinjiang has prioritized its manufacturing industry on its agenda, continuously driving economic transformation and upgrading, crafting the "Made in China" gold standard. The clothing brand Septwolves is a prime example. In just a few decades, Septwolves has grown from a small garment factory with only a few dozen workers to a household name that has gone public. The success is largely due to the government policies that encourage enterprise innovation. The government has guided businesses to change their operating models, implement brand strategies, restructure for public listing, establish modern corporate governance systems and enter the capital market.

In 2023, Jinjiang's private economy surpassed 800 billion yuan (around $110 billion) in output value, with over 90,000 enterprises, 51 listed companies, and 16 government-recognized brands. This has created a number of globally recognized independent brands, earning Jinjiang titles such as "brand capital" and "fashion city." It is now standing as one of China's most economically developed counties.

More importantly, amid rapid economic growth, Jinjiang has allocated over 70 percent of its fiscal expenditure to social programs for improving people's lives, ensuring that the fruits of development are shared by all. By the end of 2023, Jinjiang had provided educational assistance to 5,470 people, medical aid to 1,325 households, and helped 150 individuals secure employment or start their own businesses. Additionally, Jinjiang's government has introduced a series of employment policies, crafting over 120,000 new urban jobs from 2019 to 2023. Jinjiang fully exemplifies China's people-centered development approach, improving livelihoods, balancing economic efficiency with social equity, and accelerating common prosperity through Chinese modernization.

Jinjiang's success mirrors China's broader development journey. Since the reform and opening-up, especially since the 18th CPC National Congress, China has undertaken extensive social system reforms.

In poverty alleviation, China has achieved remarkable results, lifting nearly 99 million rural poor out of extreme poverty by the end of 2020. China has leveraged modern technology and Internet platforms to mobilize government, business and society to fight poverty comprehensively. For instance, e-commerce has helped more farmers to sell their products online. In 2020, the online retail sales in 832 impoverished counties exceeded 300 billion yuan (around $46.57 billion), with over 3 million online businesses.

Income disparity has been effectively narrowed, and income equity has been strongly safeguarded. Over the past decade, China's Gini coefficient has steadily declined. The government has improved the income distribution structure through regulating unreasonable and excessively high incomes, combating corruption and tax evasion, and implementing fiscal transfer system reform and personal income tax reform.

Furthermore, social security and public services have significantly improved. China has built the world's largest social security system. From 2012 to 2022, the number of people covered by basic pensions, unemployment and employment injury insurance increased by 250 million, 80 million and 100 million, respectively, enhancing the sense of fulfillment, happiness and security among the population in a more substantial, secure and sustainable manner.

China, with its huge population, faces greater economic development tasks and immense social welfare responsibilities compared to other countries. Despite this, China has maintained a welfare level compatible with its development. When the per capita GDP first exceeded $10,000 in 2019, China's social expenditure accounted for 34.41 percent of total government spending, roughly equal to the average level of Organization for Economic Co-operation and Development (OECD) countries (36.74 percent) when they reached the same per capita GDP milestone, demonstrating the Chinese government's commitment and responsibility.

Chinese modernization strives not only for rapid economic growth but also for common prosperity and social harmony. Its success in improving living standards offers valuable experiences for other countries. First, active government intervention and policy support is crucial for ensuring social equity and improving people's livelihood. Second, simple relief measures have limited long-term impact. As an old Chinese saying goes, it's better to teach someone to fish than to give him a fish. Instead of merely distributing subsidies, it's more effective to share the experience of poverty reduction to address both the symptoms and root causes of poverty. Last but not least, innovation is vital for economic development, job creation and improving living standards.

The essence of governance is to enrich the people. Over the past 40 years, China has demonstrated a feasible path of coordinated economic and social development, balancing fairness and efficiency.

China's journey toward common prosperity is vividly reflected in its social and economic landscape. The country's catering industry is a prime example of this growth, with national catering revenue reaching around 5.29 billion yuan (about $743 billion) in 2023 – a striking 20.4 percent increase from the previous year. Tourism is booming as well. In 2023, the domestic tourism sector recorded a whopping 4.89 billion trips, a 93.3 percent increase year-on-year. The number of international trips, both inbound and outbound, exceeded 190 million, an increase of more than 2.8 times over the previous year, cementing China's status as the world's largest source of tourists and a major destination. Transportation trends highlight further strides in development. In the first half of 2024, Chinese railways carried a record-breaking 2.096 billion passengers, an 18.4 percent increase from the previous year. As of June 2024, the number of motor vehicles in operation in China reached 440 million.

These figures are not merely data points; they illustrate the significant improvement in living standards and the ongoing transformation and diversification of China's consumption structure.

Chinese modernization is about achieving common prosperity for all. Looking ahead, China will persist in promoting social system reforms and improving livelihoods, while also sharing its wisdom and experience in poverty reduction and modernization with other developing countries.

The author Yang Dian is deputy director of the Institute of Sociology and special research fellow at the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era Research Center, Chinese Academy of Social Sciences.

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