Common Prosperity Drive in China


From UPSC perspective, the following things are important :

Prelims level: Common Prosperity Drive in China

Mains level: Comparison of Chinese and Indian economic policy

Chinese President Xi Jinping has called for China to achieve “common prosperity”, seeking to narrow a yawning wealth gap that threatens the country’s economic ascent and the legitimacy of Communist Party rule.

What is ‘Common Prosperity’?

  • “Common prosperity” was first mentioned in the 1950s by Mao Zedong, founding leader of what was then an impoverished country.
  • The idea was repeated in the 1980s by Deng Xiaoping, who modernized an economy devastated by the Cultural Revolution.
  • Deng said that allowing some people and regions to get rich first would speed up economic growth and help achieve the ultimate goal of common prosperity.
  • Common prosperity is not egalitarianism. It does not mean “killing the rich to help the poor”.

Components of the drive

  • The push for common prosperity has encompassed a wide range of policies, that includes curbing tax evasion and limits on the hours that tech sector employees can work to bans on for-profit tutoring in core school subjects, and strict limits on the time minors can spend playing video games.

Why in news now?

  • China became an economic powerhouse under a hybrid policy of “socialism with Chinese characteristics”, but it also deepened inequality, especially between urban and rural areas, a divide that threatens social stability.
  • This year, Xi has signaled a heightened commitment to delivering common prosperity, emphasizing it is not just an economic objective but core to the party’s governing foundation.
  • A pilot program in Zhejiang province, one of China’s wealthiest, is designed to narrow the income gap there by 2025.

How will it be achieved?

  • Chinese leaders have pledged to use taxation and other income redistribution levers to expand the proportion of middle-income citizens, boost incomes of the poor, “rationally adjust excessive incomes”, and ban illegal incomes.
  • Beijing has explicitly encouraged high-income firms and individuals to contribute more to society via the so-called “third distribution”, which refers to charity and donations.
  • Several tech industry heavyweights have announced major charitable donations and support for disaster relief efforts.
  • Other measures would include improving public services and the social safety net.

What will be the economic impact?

  • Chinese leaders are likely to tread cautiously so as not to derail a private sector that has been a vital engine of growth and jobs.
  • This goal may speed China’s economic rebalancing towards consumption-driven growth to reduce reliance on exports and investment, but policies could prove damaging to growth driven by the private sector.
  • Increasing incomes and improved public services, especially in rural areas, would be positive for consumption, and a better social safety net would lower precautionary savings.
  • The effort supports Xi’s “dual circulation” strategy for economic development, under which China aims to spur domestic demand, innovation, and self-reliance, propelled by tensions with the United States.

Try answering this PYQ from CSP 2020:

Q.One common agreement between Gandhism and Marxism is :

(a) The final goal of a stateless society

(b) Class struggle

(c) Abolition of private property

(d) Economic determinism


Post your answers here.
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a and b

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