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‘Common Prosperity’ Policy in China

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October 25, 2021

What is the issue?

With widening income inequality, rising debt levels and social disorder caused by market-driven policies, China increasingly feels the need for a policy shift.

Why is the call for a ‘common prosperity’ policy?

  • China has been adopting principles of market capitalism with tenets of Marxist-Leninist ideology.
  • With these dual ideological principles and mechanism, China has emerged as an economic powerhouse.
  • But all such policies followed after Mao, especially during Deng Xiaoping’s era, are not proving to be socially compatible for Chinese society.
  • A market-led socialistic pattern of economy is resulting in a few becoming extravagantly rich and a majority suffering from sharp income inequality and rising poverty.
  • The current leadership is highly dissatisfied with the policies that have been driving the Chinese economy, society and politics for the last four decades.
  • So, a societal correction has gained priority under Xi’s leadership.
  • There is a conscious attempt to curb corruption, and change the policies to restrict the rich from becoming richer at the cost of society.
  • Efforts are on to revisit the state policies, which would focus exclusively on ‘common prosperity.’
  • An initial sign is the government mounting unprecedented crackdowns on Alibaba and other top corporate firms from various sectors.

What is the priority now?

  • The political debate focuses on how this policy shift to ‘common prosperity’ can be effectively used to rewrite a kind of social contract that still draws its inspiration from Mao’s ideas.
  • Mao propagated this concept in the policies and campaigns of hundred flower movement and cultural revolution.
  • However, Deng’s ascendancy to power sidelined such ideas, and laid emphasis on ‘rich is glorious’.
  • Deng believed that allowing some people and regions to get rich first would speed up economic growth and help achieve the ultimate goal of economic modernisation.
  • But such policy emphasis of Deng has proved to be a societal disaster.
  • The call for ‘common prosperity’ will soon be taken into account in the decision-making process.

What does the push for common prosperity envision?

  • Curbing tax evasion
  • Reducing limits on the hours that the tech sector employees can work
  • Bans on for-profit tutoring in core school subjects
  • Strict limits on the time minors can spend playing video games, among many others.




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