Crusade for ‘common prosperity’
The author is the head of the China Instituteof the JoongAng Ilbo.
Cries can be heard in China’s IT, real estate and private education markets as the Chinese government implements strict regulations. Why is this happening? It is deeply related to the administrative philosophy of the leader.
We need to read the calculation of Chinese President Xi Jinping. China’s social development is divided into three stages: wenbao, xiaokang and datong. Wenbao society, where people have no worries about living, was attained around 2000. Xiaokang adds cultural lifestyle, and it was achieved last year. The next stage of datong is closer to Utopia. Where is China headed after xiaokang society? What Xi Jinping advocates is the pursuit of “common prosperity for all.”
Deng Xiaoping said that the essence of socialism is to attain common prosperity. Deng pursued reform and opening, which was hugely successful. But it accompanied the problem of an increasing wealth gap between the rich and the poor. Here, a debate began during the Hu Jintao era. Guangdong’s Party Secretary Wang Yang advocated making the pie larger. Bo Xilai, the party secretary of Chongqing, opposed and argued that if the pie were shared unfairly, no one would make the pie, and it was more important to distribute the pie fairly. And he supported common prosperity for all.
The pie debate ended as Bo was purged. But Xi Jinping is proposing “common prosperity” as the goal for China after xiaokang society. Xi’s idea of common prosperity is different from what Bo Xilai championed. Xi wants to make the pie bigger and distribute it fairly. The province of Zhejiang announced a plan to build a “common prosperity model district” last month. Zhejiang Province is the place where Xi established his political base.
Xi is encouraging Zhejing’s experiment of common prosperity with his political life at stake. If successful, he can claim that the socialist system is superior to the capitalist system. He can also have an advantage in the system rivalry with the U.S.
Xi himself can reinforce the foundation for long-term reign internally as a leader with great accomplishments. Therefore, the “common prosperity” slogan is likely to spread in China for a while. Companies, or industries, which pose threats or obstacles cannot be free from Communist China’s reckless attacks.
Doing business in China can succeed when it rides on the wind blowing in China, as always. Going against the wind is likely to fail. Xi is calling the wind of “common prosperity” for the third term of his power in the fall of 2022. Businesses need to watch the direction of the wind so they can set sail or row.