China retreats 'common prosperity' initiative as Xi Jinping seeks third term: Report

Beijing's 'common prosperity' initiative has hit a snag as Chinese President Xi Jinping is vehemently campaigning for a third term in power. According to a report by Hong Kong Post, Chinese officials have displayed a "tactical retreat" from slapping penalties on the wealthy class, including celebrities and tech giants apparently in a shift of focus towards keeping the economy, hit by stringent COVID-related policies, stable. As CCP has set the ball rolling for Jinping to win the third five-year term, he is desperate to present a more prosperous, influential, and developing Chinese economy, the report said.

With the rising inflation due to a hike in oil prices and staple food items in the wake of the Ukraine war and subsequent measures to curb the fresh COVID-19 outbreak, Beijing has been struggling to reverse the slug in its economic development in the first quarter. As per the report, the "common prosperity" initiative has just been postponed rather than completely abandoned since the Chinese Communist Party (CCP) sees it to be a long-term goal.

It is pertinent to mention that CCP unanimously elected Jinping as a delegate to the 20th National Congress on April 23. He also has been nominated by the CPC Central Committee as a delegate to the 20th CCP National Congress to be held in November, Xinhua News agency reported.

What is 'Common Prosperity'?

China's 'common prosperity' emerged as the most influential concept in policymaking in Beijing since 2021. The CCP government sees it as a strong tool to reduce the income gap and promote "people-centric" development, as per China Briefing. The concept was introduced by Xi Jinping at the Central Committee for Financial and Economic Affairs in August 2021. During his speech, Jinping argued that the policy will “reasonably regulate excessively high incomes, and encourage high-income people and enterprises to return more to society.” He underscored that “allowing some peasants to get rich first is a practical policy to achieve common prosperity.”

According to experts, cited by Hong Kong Post, Beijing sees the policy as a tool to garner commoners' support for Jinping, in turn, promoting China's centralised management system compared to the West. Under the policy, Chinese regulators crack down on businesses to diminish the widening rich-poor gap. However, the implementation led to a massive backfire with many corporations laying off manpower and declaring bankruptcy. The report underscored that the targeted strikes led to wiping out more than $1 trillion off the Chinese market.

Noting the downturn in the mainland's economy, Beijing's Politburo did not mention the term "common prosperity" during the last financial meeting for 2022, Hong Kong Post said. They further emphasised that "stability" is the top priority for the upcoming fiscal year. Although Beijing's crackdown has continued to rattle international and domestic traders, China has, however, affirmed to stakeholders and international investors that its market is "open for business."

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