Four decades ago, China’s most powerful communist leader, Deng Xiaoping, said, ‘The country will allow some people to become rich first in its race for development.’ But now these rich people are on the radar of President Xi Jinping. Jinping wants these business tycoons to share their immense wealth with the country. Recently Jinping has announced that the Communist Party of China will now work for ‘shared prosperity’. For this, the party has started pressurizing the businessmen and entrepreneurs to return more to the society.
Actually, Jinping is preparing the chessboard for the third term, for this he wants to woo farmers and working families. With the same intention, he has said many times before that ‘we cannot allow the gap between the rich and the poor to widen’. They feel that the widening gap in prosperity may reduce people’s trust in his leadership.
The Communist Party believes that equitable distribution of wealth will increase the spending capacity of the people of the country and reduce dependence on Western capital. Jinping has set a target of 2035 for ‘shared prosperity’. But it is not clear how to achieve this. Government advisors have also given suggestions like higher property tax on expensive homes. The authorities, however, are proceeding cautiously on this option, as wealthy urbanites tend to have many homes.
On the other hand, the Chinese government has started action against companies in the field of tech, finance, education to crack down on money laundering. Fred Hu, the founder of Primavera Capital Group in Hong Kong, believes that it is not right to scold entrepreneurs for rising inequality. This can inadvertently create a different kind of inequality. After the recent strictures, big companies have started opening their safes.
Alibaba has announced a grant of Rs 1.13 lakh crore for rural health. Tencent is also giving the same amount for social work. Food delivery app Meituan’s founder Wang Jing has also given shares worth more than 15 thousand crores for philanthropic works.
Top 1% hold 31% of country’s wealth in China, so change is necessary: Experts
Professor of Economics at Peking University. A powerful China should be fair and just, says Yao Yang, but in reality it is not. According to Yang, despite being a socialist, China is one of the worst countries in terms of redistribution. Public spending is more focused on big cities and elite institutions. Anyway, the future of the Communist Party is at stake, so this change will work. According to experts, the pressure is also necessary because the top 1% of China’s people own 31% of the country’s wealth. It was 21% in 2000, according to Credit Suisse. Whereas in the US 1% owns 35% of the wealth.
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