Wealth gap sparks Xi’s call for ‘common prosperity’

China could soon reduce the gap between the rich and poor by imposing new taxes on property and inheritance, capping state-owned-enterprise (SOE) executives’ salaries, strengthening antitrust enforcement and promoting more charity. All these suggestions were made by economists and commentators soon after President Xi Jinping spoke at a top Communist Party financial and economic affairs committee meeting on Tuesday, where the leader said China should aim to promote “common prosperity.”

Xi, who is also party general secretary, also told the committee that the country should pursue high-quality development and coordinate work on forestalling major financial risks. The announcement is the latest in a series of regulations and moves that are raising new questions about China’s capitalist credentials.

In May 2020, Premier Li Keqiang sent shockwaves when he said 600 million people were making less than 1,000 yuan per month (US$153), although the country’s disposable income per capita amounted to 30,000 yuan. According to the Beijing Normal University, 964 million people, or 68% of the 1.4 billion population, earn less than 2,000 yuan per month.

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