Read more: How China’s Digital Currency Could Challenge the Dollar Unsurprisingly, they have been throwing money at the problem, pouring billions into charitable foundations as a gesture of appeasement. This is the context in which China’s wealthiest have been left to interpret the implications of common prosperity for themselves. Instead of new laws and regulations to ensure transparency and accountability, that purge instead borrowed from the ancient Chinese tactic of “kill a chicken to scare the monkeys,” says Moser-making an example of 1.5 million officials, a comparatively small number, to send a clear message to all 90 million apparatchiks that graft was no longer tolerated.
The vagueness mirrors an anti-corruption drive started by Xi in 2012. But the central government has offered little specific guidance as to what socialism and common prosperity mean in practice. Ride-hailing firm Didi and e-commerce platform JD.com have meanwhile moved to establish trade unions for their staff, who until now have typically been employed casually via third-party contractors, receiving paltry benefits. Officials have also announced the ramping up of a scheme to rotate the best teachers among different schools in order to equalize education standards. So far, celebrities who flaunt their wealth and welch on taxes have found themselves abruptly taken off the Chinese internet.
Of course, “democratic” means different things in China than it does in the West, but there’s no doubt that the goal of a “socialist country” is more important to Xi than it was to his immediate predecessors. The preferential 10% tax rate enjoyed by internet companies is also expected to be rolled back in favor of the standard 25% corporate rate. Read more: What the Crackdown on China’s Tech Firms Is Really AboutĪ senior CCP official said last month that “common prosperity” does not mean “killing the rich to help the poor.” But rumors are swirling that Beijing may bring in property, inheritance, and capital gains taxes to level the playing field in a society where the top 1% now control 31% of wealth, according to Credit Suisse-up from 21% two decades ago. In words that have since become infamous, Deng kicked off the country’s export-driven resurgence with the exhortation: “Let some people get rich first.” Many forget that he went on to say that those allowed to achieve wealth would be expected to “lead other regions and people to gradually achieve common prosperity.” His successors now look poised to make good on the bargain. But there’s no denying that the biggest socio-economic change, since reformist leader Deng Xiaoping unleashed market forces in the late 1970s, is now underway. In a bid to ease concerns, the People’s Daily ran an editorial Wednesday, saying that the regulatory moves were not designed to hurt business and the status of the private sector remained the same.
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