context: Beijing's strategy of realising common prosperity envisages a long-term and gradual redistribution of wealth by tax and charity, more equitable distribution of income and public services, and a rejection of Mao-style egalitarianism. The economically vulnerable population, especially in rural areas, will have basic livelihood guaranteed by social services. The mention of ‘redistribution by tax’ also paves the way for property tax and inheritance tax, as well as tax breaks for donations to charity. However, although Beijing pledges to protect legal income, uncertainty in policy movement raises concerns regarding the definition of legal income.
Xi Jinping presided over the 10th Central Financial Commission meeting on 17 Aug 2021, stressing that 'common prosperity' should be introduced gradually. He specified
- 'common prosperity' as an important feature of socialist modernisation
- realising 'common prosperity' in phases
- opposition to egalitarianism
- recognising that it is a long term procedure with difficulties
- encourage the exploration of different methods
- based on 'high-quality development' to
- improve people's livelihoods
- provide upward mobility
- raise education levels
- prioritising baseline guarantees for people's livelihoods
- improve the balance of public services
- guarantee housing, senior care and livelihoods for the poverty-vulnerable population
- improving the design of the redistribution system
- redistribution through taxes, transfer payments, social security
- expanding the mid-income population
- adjusting high incomes
- encouraging high-income populations to give back to society (CP note: for instance by reforming the charity and NGO system or improving tax incentives to encourage charity and donations)
- banning 'illegal income'
- promoting the market economy
- enhancing balance, inclusiveness, coordination of market
- regional balance
- industrial coordination (CP note: by encouraging high-end manufacturing and innovative industries, but suppressing property real estate industry and other speculative businesses)
- supporting SMEs
- improving healthy development of capital (CP note: stricter regulation of anti-monopoly)
- enhancing balance, inclusiveness, coordination of market
- ameliorating culture and entertainment