Sep 20, 2021
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China is reducing inequality

China is reducing inequality

The PRC is one of the few countries where the government is taking real steps to achieve social justice.

Having achieved serious economic successes and actually becoming the second, and according to some estimates, even the first economy in the world, China remembered the communist nature of its state.

Covenants of Lenin and the MAO

Capitalist elements, successfully implemented in the country’s economy, allowed the Celestial Empire to rise high in terms of labor productivity, saturation of the domestic and foreign markets. But members of the ruling Communist Party – the CCP – remember well the precepts of Marxism-Leninism, which they still honor as the greatest teaching on earth.

Therefore, the leaders of China began to speak louder and louder about common prosperity as the goal of the country’s development. In particular, this was recently announced by the President of the People’s Republic of China Xi Jinping, having convened the Central Commission for Financial and Economic Affairs. The audience was offered to develop a development concept that would be focused not only on the enterprising and the most successful, but also on the majority of ordinary people in China.


The first thing China has begun to do at the new stage of social development is to create basic institutions, mechanisms for coordinating the primary distribution and redistribution of income.

Simply put, the system of economic management is being adjusted so that big business and capital stop swimming in luxury and, through reasonable mechanisms of profit redistribution, share money and the blessings of life with hundreds of millions of fellows.

What do I need to do? The recipe is as simple as a bowl of rice. China has decided to dramatically improve the accuracy of cash transfers, which will significantly increase the proportion of the population with middle incomes. The same mechanism will improve the condition of the population with low incomes. At the same time, the authorities will intelligently regulate high incomes and even more actively suppress illegal income.

By applying the regulatory measures outlined by the leader and not falling into “dispossession”, the country’s leaders are quite capable of making the too rich a little poorer, and the too poor a little rich. No sudden movements.

According to the key indicator of welfare – GDP per capita – Russia currently has 10 thousand dollars, China – 10.5 thousand – this is the IMF data. But back in 2013, GDP per capita in Russia was 2.2 times higher than in China. But time is passing, and China now faces a more difficult task – to catch up with the United States in terms of the welfare of the entire population. And such a task has already been set by the leaders of the PRC.


Of course, China’s big business is unlikely to be overjoyed at the impending prospects of a more equitable distribution of income. But the smart and cunning Chinese nouveau riche understands: you shouldn’t take the situation to extremes.

Therefore, large Chinese capital immediately and correctly reacted to Xi Jinping’s speech. For example, Internet giant Tencent announced a 50 billion yuan ($ 7.71 billion) grant for a “special project of common prosperity.” Other big tech companies followed Tencent’s lead and began competing to see who would shake the cash-packed harder and louder.


There is also an active talk in China about the ratio of direct and indirect taxes, which is approximately 3: 7. Indirect taxes are added to commodity prices. But, as you know, ultimately they are included in the price of goods and services and are a hidden burden for consumers. It turns out that the actual tax burden of the rich is lower than that of the poor.

Therefore, the tax reform began. Its goal is to increase direct taxes and reduce indirect ones. This will help ease the burden of businesses, enterprises and ultimately lead to lower prices for the mass of consumers.

In addition, China is introducing an additional property tax. Ordinary people tend to have only one home, unlike wealthy people. Now the question is being resolved that the poor do not pay property tax at all. This will regulate prices in the housing market for the better.

And inheritance tax will play a major role in regulating the distribution of wealth and encouraging young people to be self-sufficient. In some cases, it can reach 50%.

In general, the Celestial Empire wants to remain a communist country, for which it needs to clearly show the world: it is possible to achieve the goal of common prosperity for all people with smart policies and competent financial regulation. True, this “happiness for centuries” is planned only by 2035 …

Evgeny Malyakin.


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