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DIVIDING THE PIE

Xi Jinping’s vision for China does not involve workers “lying flat”

Chinese President Xi Jinping stands and applauds, and partially smiles, at a government meeting in Beijing
Reuters/Carlos Garcia Rawlins
Let's all get rich.
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At a private Communist Party meeting in August, president Xi Jinping first raised his vision for “common prosperity”—his plan to help all Chinese become prosperous, instead of only a few super rich. Chinese tech giants scrambled to cite their support for the drive, pledging billions of dollars to charity, while China analysts came up with various interpretations of what Xi’s vague proposal actually meant.

In an opinion piece published last Friday (Oct. 15) in Qiushi, a core Communist Party journal, excerpts of Xi’s speech were made public for the first time, providing a more detailed explanation for his campaign, which would create an environment to reap the benefits of hard work, and legislation and reform to help redistribute wealth.

At its core, “common prosperity” emphasizes the need to bridge a deepening wealth gap in China, and promises a reasonably well-off and secure life for the country’s 1.4 billion citizens as an important justification for the Communist Party’s reign. In his speech, Xi gave a rough timeline and laid out government actions to achieve his goals. “Currently, income inequality is a prominent problem globally, some countries have seen deepening wealth gaps, the collapse of the middle class, which have led to social divisions, extreme politics, and the spread of populism,” Xi said. “This is a very profound lesson! China must firmly prevent polarization, promoting common prosperity to achieve the peacefulness and harmony of the society.”

The core message, according to Henry Gao, an associate professor of law at Singapore Management University, “is that China is shifting its policy from growing the pie to dividing the pie. [Xi’s] vision is quite different from the traditional capitalism model of ‘winner takes all’,” Gao said. “But is also different from the total welfare model of some European states. He is trying to find a balance between economic growth and equity.”

Xi clarified that the drive doesn’t mean a uniform egalitarianism, a policy pursued under chairman Mao Zedong with disastrous consequences. But the new piece also draws a clearer picture of Xi’s ideal China.

What are Xi Jinping’s thoughts on China’s future?

Xi says he aims for the country to have common prosperity by the middle of the 21st century, without giving measurements for deciding whether the target is met. His plan contains four principles and six guidelines for reaching the goal.

In the first principle, titled “encouraging getting rich through hard work and innovation,” Xi makes an explicit mention of “lying flat,” an increasingly popular life philosophy of Chinese youth who want to escape the rat race. “[A] happy life is earned through hard work, while common prosperity is created through wisdom and diligence,” Xi said. “[We] need to prevent [a] rigidity of social class, smooth the path towards climbing up the social ladder, create more opportunities for people to get wealthy, and hence form an environment where everyone can participate in its development, avoiding ‘involution’, and ‘lying flat’,” he wrote.

Gao believes this is the first time the leader has publicly mentioned “lying flat.” The phenomenon, together with involution, is used by youngsters to describe growing anxiety and discontent over not being able to progress in life no matter how much effort is put in. It is of increasing concern for the government; a passive approach to life could thwart its goal of fostering a productive populace, and advancing the country’s development.

In another principle, Xi emphasized that local governments should do things “within their capacity.” This, he says, means authorities should not make promises that they can’t meet, and avoid “excessive guarantees” that could make the country fall into the trap of “welfarism.” The term in China usually refers to a tolerance of the “lazy,” and the belief that westerners are dissuaded from working given the amount of social welfare support they receive.

“This rejection of welfarism is a wake-up call to observers who maintain that Xi’s goal is to have a socialist welfare state,” said Gao. “That has never been on the agenda and will not be on the agenda. The first priority is always to achieve the goals of the state, such as the great rejuvenation of China.”

China offers basic social security coverage to citizens, including medical insurance and pension plans. But some analysts have argued that given many are not covered comprehensively by the plans, including a large number of migrant workers, the country could in fact spur consumption and growth by enhancing its social safety net.

What does this mean for the future of policy in China?

Xi’s six policy guidelines included accelerating the reform of “highly monopolized” industries, advancing the coordinated development of the finance and real estate sectors with the real economy, and firmly preventing the “disorderly expansion” of capital, a term often used by the party to refer to what it sees as the excessive power of big companies. Although the plans expressed in the opinion piece sound vague, the country has already carried out some actions towards these ends.

The most well-known is China’s unprecedented antitrust crackdown on tech giants, including Alibaba, in the last year. It has also increased its scrutiny of the property sector, making it harder for developers to borrow for fear of a housing bubble. This line could indicate the government’s determination to continue its regulatory actions in those industries.

In addition, under the guideline to “enhance the adjustment and regulation of high income,” Xi said that the state should actively, yet steadily, push through the legislation and reform of a property tax, which the country has discussed for decades but is yet to launch, partly due to resistance from local governments who worry a potential sell-off in properties. He also mentioned that the government needs to study the possibility of expanding consumption tax. This tax currently applies to individuals and firms that manufacture, import, or sell taxable products, ranging from luxury goods to passenger cars.

“In my opinion, pursuing common prosperity is a general concept that involves the whole society,” Xi said. “We need to make substantial and long-term efforts.”

Correction: An earlier version of this article described Xi Jinping’s Qiushi piece as a new exposition of his common prosperity plan. Rather, it contained excerpts from Xi’s original speech in August, made public for the first time.

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