China Economist Is Rare Voice of Caution on ‘Common Prosperity’
China Economist Is Rare Voice of Caution on ‘Common Prosperity’
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An influential liberal Chinese economist has warned against excessive government intervention and the erosion of the market economy in the nation’s pursuit of “common prosperity” and more income equality.
Targeting rich people and entrepreneurs will only hurt jobs, consumers, charitable giving and lead the nation back into poverty, Zhang Weiying, an economics professor at Peking University, wrote in an article published by the Chinese Economists 50 Forum, a think tank that includes some of the nation’s most prominent economists.
Market-oriented reforms since the late 1970s have made China a fairer and more equal society, said Zhang, a long-time vocal critic of big government whose early work has influenced China’s price system reforms. A free economy has given common people opportunities to climb out of poverty and become wealthy, he said.
“If we strengthen our confidence in the market economy and continue to push forward market-oriented reforms, China will move toward common prosperity,” he said. “If we lose our faith in the market and introduce more and more government intervention, China will only go into common poverty.”
Zhang’s article was a rare voice of caution as Beijing ramps up efforts to reduce income inequality and reshape society under a broad campaign of achieving common prosperity in the country. Crackdowns across various industries have triggered concerns and speculation that China will backtrack on market reforms that propelled the economy over the past four decades and led to a class of powerful billionaires.
Top leaders have alluded to strengthening “tertiary distribution,” or philanthropy, to encourage the rich to give back to society. Zhang warned it’s crucial to preserve entrepreneurs’ motivation to create wealth, because without it “the government will have no money to transfer payments, and charity will become a source of water.”
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With assistance from Bloomberg