The "common prosperity" theme by Xi Jinping is a confusing one, and even the CCP is learning how to implement it.
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Xi Jinping and his action call for "Common Prosperity"
- The story: Since 1949, during which the Chinese Communist Party (CCP) has been in power, its leaders have often articulated their visions and signature platforms using lofty rhetoric and vague slogans. In the 1980s, Deng Xiaoping spoke of pursuing “socialism with Chinese characteristics.” In the first decade of this century, Jiang Zemin sought to build a “socialist market economy.” Early in his tenure, Xi Jinping referred to his bid to restore China’s historical status as a global power as “the China Dream.”
- Only phrases, or more to it: These Chinese Marxist phrases have left foreign observers scratching their heads. That has also been the case with the most recent slogan to emerge under Xi: “common prosperity.”
- The term gained prominence this past summer as Chinese authorities aimed a barrage of new regulations at private businesses, including a number of major tech companies, in the name of rectifying the excesses of capitalism and restoring the CCP’s original mission of serving the masses.
- The new rules effectively wiped out an estimated $1.5 trillion from those firms’ stock valuations. Ever since, investors and others have been scrambling to decipher common prosperity and grasp its implications for China’s future policies and economic prospects.
- Finding the clues: Perhaps the most important place to look for clues is in a manifesto that Xi delivered as a speech to officials at the CCP’s Central Financial Committee in August—a long excerpt of which was later published in Qiushi in October with the title “Resolutely Advance Common Prosperity.” Qiushi is no any ordinary regime mouthpiece; it is the theoretical journal of the CCP’s Central Committee, a body of roughly 350 top elites who make key political decisions.
- What is published there carries a great deal of weight, and Xi’s manifesto is no exception. Addressed chiefly to the bureaucracy, it is not propaganda for the public: rather, it should be understood as a set of instructions for government officials who are tasked with implementing Xi’s vision.
- His words will percolate down through the hierarchy and be refined, level by level.
- “Common prosperity means that all the people will prosper together, both materially and spiritually, not just a small minority.” It is not, he stresses, a call for “egalitarianism [with] everyone being the same.” Nor will the CCP fall into “a trap of welfarism” that rewards the lazy. Instead, he pledges, the party will continue to “encourage wealth creation through diligence and innovation.”
- There is a tension: Throughout his instructions, Xi struggles with the tension between rewarding capitalists and restraining their wealth. On the one hand, he vows to limit “unreasonable income” and reject “the chaotic expansion of capital” through regulations, breaking up the private sector’s corporate titans, and urging the rich to donate. But at the same time, China “must continue to activate and leverage entrepreneurial incentives.” Squaring this circle is tricky: if entrepreneurs’ rewards are capped or if they cannot confidently secure returns on their investments, they will invest and innovate less.
- The truth about the Communists: The manifesto inadvertently makes clear a fundamental reality about the CCP: despite its remarkable success in creating wealth and spurring growth, the party has no clear answers when it comes to resolving the puzzle of how to tame the excesses of capitalism without stifling its creative potential.
- Summary: Like governments all over the world, the CCP has not yet figured out how to have its cake and share it, too. Xi admits as much, writing: “On fixing poverty, we have plenty of experience; but on managing prosperity, we still have much to learn.” Precisely because Xi has no road map to follow, he urges his comrades to adapt and experiment. The ultimate impact of common prosperity will depend on how officials at various levels of the hierarchy interpret and translate Xi’s aspiration into concrete policies.
- EXAM QUESTIONS: (1) Explain the massive change in direction in China, in the name of "common prosperity". (2) What is the meaning of this statement made by President Xi Jinping - “On fixing poverty, we have plenty of experience; but on managing prosperity, we still have much to learn.” (3) What can India learn from the Xi Jinping "common prosperity" model, when it comes to battling its own inequality concerns?
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