Key Concept | Common prosperity: Turning dreams into reality
By Robert Walker  ·  2023-05-09  ·   Source: NO.19 MAY 11, 2023
Workers prune saplings in a village in Xinji City, Hebei Province, on April 23. Horticulture is a specialty industry that contributes to income increases in the city (XINHUA)
On September 25, 1953, when China's intention of achieving common prosperity was first announced in the country's largest-circulated newspaper People's Daily, it must have seemed like an impossible dream. A census conducted earlier that year reported a total population on the Chinese mainland of 582.6 million, with 87 percent residing in the rural areas. A similar proportion of the population at the time was extremely poor and the literacy rate was just over 20 percent.

Seventy years on, with the literacy rate today at 97.33 percent and extreme poverty eliminated as of late 2020, common prosperity is no longer a dream but a firm policy objective. However, this isn't something the Chinese Government can accomplish all on its own.

Eradicating poverty took the country decades. Not only were integrated policies implemented at national, provincial, county, township and village levels, but society was engaged to support these policy initiatives. In 2015, President Xi Jinping reiterated China's goal of eradicating extreme poverty by 2020 and, in the subsequent period, state-owned enterprises supported poverty-relief programs covering more than 10,000 villages. Similarly, many thousands of private enterprises aided over 10,000 rural enterprises in as many villages.

As with the eradication of extreme poverty, accomplishing common prosperity will require the support and active mobilization of China's entire population.

Society-wide responsibility

Strong economic growth greatly assisted the elimination of extreme poverty. However, it did generate an income distribution structure shaped like a pyramid with comparatively a few rich people at the top and many on lower incomes beneath them. Achieving common prosperity requires that the benefits of growth be shared more fairly.

China has likened common prosperity to transforming the pyramid-shaped income distribution structure into one looking like an olive, given the latter is larger in the middle and smaller at each end. Attaining the goal will require the contributions from all.

Corporate social responsibility, referring to commercial organizations contributing their expertise and other resources to social causes, is important and has been required of companies in China since the country amended its Company Law in 2005. One should note that the contributions to social welfare of state-owned enterprises are at a level twice that of privately owned and foreign-funded companies.

While corporate social responsibility is important, this on its own will not achieve common prosperity. The United States, more than any other high-income country, relies on the largesse of companies and philanthropy rather than on the beneficence of the state to support social welfare. But, from 2011 to 2021, income inequality in the U.S. rose from an already high level; that in China fell, suggesting increased common prosperity.

Other data confirm China's progress toward common prosperity. Between 2013 and 2021, the share of income received by the richest one fifth of people in China fell by 1.5 percent, while the proportion going to the bottom two fifths rose by 4.4 percent. Even so, the incomes of the richest one fifth are 10.2 times those of the poorest one fifth. This, also known as the "income quintile share ratio," compares with an average of just 4.98 for the euro area.

Individual social responsibility means identifying oneself with others and adopting attitudes and behaviors that favor the common good. In China, as elsewhere, many middle-class people presume that poverty and lack of success are due to laziness rather than to social unfairness or unfettered market forces. Those emphasizing laziness tend to have more extravert and authoritarian personalities, and share social attitudes prioritizing hard work and intelligence as the reasons for success.

Graduates and individuals who study the humanities, arts and social sciences are less likely to blame economic failure on lack of effort. Therefore, education will perhaps foster a level of individual social responsibility necessary to achieve common prosperity.

Villagers cross a suspension bridge renovated with the help of a Chinese company that operates a local hydropower station in Lamjung, Nepal, in November 2022 (XINHUA)

New strategies

In President Xi's report to the 20th National Congress of the Communist Party of China in October 2022, he stressed the need to "put the people first… stand firmly with the people, respond to their wishes, respect their creativity and pool their wisdom."

When people experiencing poverty in Guizhou Province in the southwest were asked about the nature of poverty, they emphasized the struggle and physical and emotional suffering resulting from a lack of decent jobs, low income and material deprivation.

Their wish would be to ensure that administrative systems always empower those seeking their services. They would want staff to be well trained in terms of customer service and compliance costs to be minimized, easing access and enabling service users to fulfill their social responsibilities and duties as citizens.

China demonstrated the strength of its collective social responsibility in the government's effective campaign to eradicate extreme poverty. But it requires new strategies to achieve common prosperity. Strategic investment will focus on promoting rural revitalization and a greener economy. In parallel, human capital development will upskill the workforce to embrace a technologically driven, post-industrial economy without a large informal sector dependent on low wages.

Such policies will increase incomes, raising more taxation to further facilitate strategic investment and the increased social security and social protection. This would include enhanced rural social assistance, improved social insurance for migrant workers and those in the gig economy, a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs, better coordination of social insurance, and more effective health and social care services.

While this type of collective social responsibility is necessary to achieve common prosperity, it is again insufficient. China's wellbeing, like that of other countries, is dependent on fair trade and cooperative international relations.

With a trade system and financial arrangements that mostly benefit rich nations at the expense of developing ones, the lack of international social responsibility is clear. National self-interest is invariably placed above global social responsibility as illustrated by inadequate action on climate change, COVID-19 and the UN Sustainable Development Goals.

Social responsibility, as a moral principle, cannot be constrained by national borders or be limited to collective, community, corporate and individual responsibilities. It must embrace international relations.

China, committed to a community with a shared future for humanity, is leading by example in this regard with, for instance, the Belt and Road and Global Development initiatives, which are based on economic cooperation and development.

After all, a fundamental restructuring of international governance is the only way to turn the dream of common prosperity into reality. 

This is an edited excerpt of an article first published in China Today magazine. The author is a professor at the School of Sociology under Beijing Normal University, and professor emeritus and emeritus fellow at Green Templeton College, University of Oxford

Copyedited by Elsbeth van Paridon

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