Chinese President Xi Jinping has recently come out and asked China to help him achieve the goal of Common Prosperity, a bill that can help narrow the growing wealth gap and focus on social value. Common Prosperity was first mentioned by Mao Zedong the former president of the People's Republic of China in the 1950s but has come to existence again with the current President Xi Jinping.
Currently, people of the country are unclear on how this law may be implemented, but according to the speculations, the big tech companies of China are now under pressure from Beijing to donate towards the initiative. According to Xi Jinping, Common Prosperity is not only an Economic goal that the country has to reach, but is also the core of the Chinese Communist party’s governing foundation.
The Growing Wealth Gap in China
According to few studies, 20% of the China rich population earn ten times more than 20% of the poor population. This is a wider wealth gap than compared to countries like America, Germany and France.
The statistics of the country say that over 600 million people (which account for over half of the country population) live on an annual income of 12,000 yuan or $1,856 US dollars. While the rich sector of the country has only increased over the past few years, China has a total number of 1,058 billionaires as of 2021.
A Brief about the Common Prosperity Bill
As mentioned above Common Prosperity was initially coined by mentioned by Mao Zedong the former president of the People Republic of China in the 1950s. The law was also mentioned again by Deng Xiapong who was the former leader of the People Republic of China, the man who played a vital role in modernizing the Chinese economy after the Cultural Revolution.
Deng Xiapong version of Common Prosperity is different from president Xi Jinping idea because it centered on allowing certain people and regions to get rich first in order to speed up economic growth in the country.
This has long been the goal of the current President Xi Jinping, as he had mentioned the goal in his 2017 speech at the party congress to mark the start of his second term.
According to him, Common Prosperity aims in closing the wealth gap in the country and proving the legitimacy of Communist Party rule. Common Prosperity is often misunderstood as egalitarianism, but it does mean bringing down the rich in order to help the poor.
According to many Chinese analysts, the goal of common Prosperity should be about helping those who need it the most. This bill will however target the Successful MNCs of the country, Tech and Gaming companies, which has alarmed the investors.
How will the Common Prosperity bill be achieved?
There are possibilities the law will include policies ranging from Tax evasions and limits on how many hours tech companies employees can work among others. The taxes are said to be used to expand the proportion of the Middle class and boost the income of the poor in the country. The goal will also help adjust excessive income of the rich and possibly ban illegal ways of income.
The Chinese Government is now encouraging the country’s top MNCs and rich individuals to contribute to society through the means of charity and donations. Recently Alibaba announced that it will be investing over $15.5 billion to support the initiative of Common Prosperity. Other big tech companies like Tencent have also pledged over 100 billion Yuan or $15 billion towards numerous initiatives.
While founders of big companies like Pinduoduo, Meituan and Xiaomi have all promised billions of dollars toward social causes in order to support the goal of Common prosperity. These companies are said to invest money into the sectors of innovation of new technology, development of the country’s economy, creating high-quality jobs and supporting vulnerable groups.
Besides that, the Chinese Government has is already implementing laws for restricting gaming time for minors below the age of 18 years old to only three hours a week.
The Chinese government is also planning to ban tutoring companies from making a profit by teaching their students the syllabus on nights and even weekends. The Government also announced a reform plan to reduce healthcare costs, especially in public hospitals.
How will the Common Prosperity bill Impact China?
Many state agencies and tech companies have started to announce that they will invest huge amounts of money to help reach this goal, by doing this they are signaling their allegiance to this Communist Party and its upcoming schemes. If this bill is put in action it can help make housing more affordable especially in the main cities of China.
There are speculations that the bill might lead to the nationalization of private companies. The bill also will help the middle class and poorer sectors of Chinese populations in accessing education and healthcare. It also encourages the richer sector of the Chinese population to be more philanthropic and donate towards the growth of society.
The income of the rural areas can increase and they will also be able to avail public services easily. With this bill, China is aiming to increase domestic demand and self-reliance which has been propelled by the ongoing tensions between China and America.
Frequently Asked Questions
What is the Common Prosperity Bill?
Chinese President Xi Jinping has recently come out and asked China to help him achieve the goal of Common Prosperity, a bill that can help narrow the growing wealth gap and focus on social value.
Who first coined the term Common Prosperity?
Common Prosperity was first mentioned by Mao Zedong the former president of the People Republic of China in the 1950s.
Why is the Common Prosperity Bill being implemented?
The Common Prosperity Bill is being implemented in order to reduce the wealth gap in China's population and help the country's economy increase.
How many billionaires does China have?
China has a total number of 1,058 billionaires as of 2021.
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