Equality does not mean ‘killing the rich’

China’s drive for “common prosperity,” as President Xi Jinping aims to ease inequality in the world’s second-largest economy, does not mean “killing the rich to help the poor,” an official from the ruling Communist Party says.

China must also “guard against falling into the trap of welfarism,” Han Wenxiu, an official at the central financial and economic affairs commission, told a briefing in Beijing.

Those who “get rich first” should help those behind, but hard work should be encouraged, he said. “We cannot wait for help, rely on others for help, or beg for help. We cannot support layabouts.”

Investors have been rattled by a series of measures that are in part aimed at curbing cost-of-living pressures as well as tightening anti-monopoly rules and data protections.

Han said recent policies regulating internet companies “absolutely” did not target private or foreign companies.

Reforms four decades ago that unleashed China’s market economy enabled the accumulation of vast personal wealth, with hundreds of billionaires minted, deepening inequality, especially between urban and rural areas.

The high cost of urban living, meanwhile, has contributed to a sharp slowdown in births, prompting China to allow families to have up to three children instead of two. Slowing economic growth and cutthroat competition have also prompted some young urbanites to embrace a passive attitude known as “lying flat.”

China should “rationally adjust excessively high” incomes, according to a meeting chaired by Xi earlier this month. High-income groups and firms are also being encouraged to contribute more to society.

Several tech industry heavyweights have recently announced major charitable donations, including online gaming giant Tencent Holdings which vowed spend 50 billion yuan (HK$60.05 billion) to promote “common prosperity.”

“Corporates need to take bigger steps to enhance their corporate governance and social responsibility. They need to work to get ahead of the regulators,” said Iris Pang, chief economist for Greater China at ING.

REUTERS

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