China Economists Say ‘Common Prosperity’ Won’t Rob the Rich
Prominent Chinese economists have moved to ease fears that the country’s push for “common prosperity” will lead to aggressive policies that seize money from the rich in order to close a yawning wealth gap.
“Robbing the rich to give to the poor” would only result in “common poverty,” said Zhang Jun, dean of the School of Economics at Fudan University in Shanghai, in an interview with The Paper on Tuesday. “The prerequisite of common prosperity is that the pie must continue to get bigger,” he added.
Li Daokui, a former adviser to China’s central bank, Tuesday emphasized the campaign to help more people enjoy economic well-being was a long-term goal.
“It cannot be expected that progress on a variety of indicators be made in the short term, for example five years,“ Li said in an interview with Phoenix Television. “We must be vigilant against ‘common prosperity’ becoming a Great Leap Forward, a risky endeavor, or something that drags down economic development and affects efficiency.”
Li, who was also previously chief economist at the New Development Bank, told the network it was “harmful” to equate common prosperity with making everyone’s income equal, and emphasized the campaign should not be confused with the anti-monopoly crackdown.
President Xi Jinping has pledged to make significant progress in achieving common prosperity by 2035, and elevated the slogan in recent speeches. The renewed emphasis has led to speculation China may finally push forward a plan to enact property taxes and other measures that will impact the country’s wealthy.
Government agencies, including China’s central bank, have said they would provide policy support to promote Xi’s common prosperity goal, while tech entrepreneurs have also answered a call for increased philanthropy by pledging to donate billions of dollars.
“Common prosperity is not to redistribute the existing accumulated wealth involuntarily,” wrote Hong Hao, head of research and chief strategist at Bocom International in a note Wednesday. “It is more about devising a fairer process.”
Qian Junhui, a professor at Shanghai Jiaotong University, wrote in an article for The Paper on Wednesday that narrowing the income gap must follow “the laws of economics,” warning that levying inheritance tax on the rich could lead to capital flight.
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