China’s apparent withdrawal from one of its most important policy initiatives shows how difficult it is to rebuild the country’s economy and reduce inequality nearly a decade after Xi Jinping’s rule.
For most of last year, Xi has trumpeted a signature agenda known as “common prosperity” aimed at redistributing more Chinese wealth, amid fears that elites have benefited disproportionately from China’s economic boom. country. The program has backed many of Xi’s policy moves, including a crackdown on tech companies seen as exploiting their market power to boost their profits.
But while some aspects of the tech crackdown continue, other parts of the program have failed, as China shifts its priorities towards bolstering slowing growth.
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Last year, the phrase “common prosperity” seemed to be everywhere, in state media, schools, and speeches by Xi and others. A historic resolution passed at Communist Party meetings in the fall, which places him on an equal footing with Mao Zedong, has used the phrase eight times.
This year, he appeared only once in a 17,000-word government work report on the economy delivered by Premier Li Keqiang in March.
The latest budget report from the Ministry of Finance did not set specific targets for the central government to allocate resources to the campaign. In Zhejiang province, which has been designated as the main testing ground for the program, new economic plans make little mention of policies that could put more money in the pockets of less well-off households.
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Beijing has backtracked on some campaign-related measures. The government last month shelved plans to extend a new property tax that could have funded social welfare schemes, but faced opposition from elites and policymakers who feared it would drive down the value properties. The tax trials currently apply only to Shanghai and Chongqing.
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