Beijing’s recently launched ‘common prosperity’ model of development is clearly already having an impact. But is the west and its allies seeing it in the right way? Nervous fund managers looking at their China portfolios are tearing out their hair. And journalists associated with western mainstream and corporate media such as the Wall Street Journal, Bloomberg, CNN. Nikkei Asia and the Financial Times have now found a new reason to demonize China further and engage in fresh China bashing.
The message going out from the anti-China ideologically fixated western and allied media is not just how investments in Chinese stocks in sectors such as education, big tech, property and services are being affected by a range of new and unexpected policies. It is to sound the alarm bells on what some propagandist commentators are describing as the ideological ramifications of China’s ‘new’ socialism.
According to a recent piece in the National Review, the influential American semi-monthly conservative editorial magazine which focuses on news and commentary pieces on political, social, and cultural affairs:
Now, however, global investors can no longer dismiss the image the CCP cultivates at home. This is an image of a recalcitrant but evolved Marxism, a new socialism adapted for the 21st century and ready to harness the power of the profit motive to serve the interests of the CCP.
And apparently to the article writer, this “new socialism” or “Marxism with Chinese characteristics” is being launched to take over the United States and the rest of the world. This development based on “the power of the profit motive” would undoubtedly make both Adam Smith and Karl Marx turn in their graves at the same time.
Across the Pacific, looking to better its US counterparts in the anti-China media competition, a Nikkei Asia piece by the agency’s senior staff writer on the latest political developments in China has the provocative gloom mongering and deliberately misleading title, Xi’s China floats dangerous trial balloon of ‘revolution’.
Common Prosperity Principles
So what exactly is in this ”recalcitrant but evolved Marxism” and coming “revolution” that has some among the western media knickers in a twist and bowels in an uproar?
In its recent August meeting reviewing the state of the nation’s economy, the Communist Party of China emphasised that
- China would focus on moderate wealth for all, rather than just a few
- Planned measures included curbs on “excessive” incomes and encouraging the wealthy to give back more to society.
The goal of “common prosperity” for the next stage of the country’s development to become a modern socialist country was announced to enable all citizens to share in the opportunity to be wealthy. The meeting notes emphasised that it was a means to “properly deal with the relationship between efficiency and fairness”.
Balanced Not Laissez Faire Development
There is nowhere in the meeting notes and reporting that can be used to accuse the Chinese authorities of being revolutionary or anti-capitalist. Or stamping out free markets and private enterprise. Or working towards the goal of absolute equal distribution. In fact according to a CNBC translation, the following assurance to the party – and also presumably aimed at critical China watchers and nervous investors – was made by President Xi:
“Finance is the core of the modern economy, with ties to development and security. It must follow the principles of marketization and the rule of law, and coordinate the prevention and resolution of major financial risks.”
What is clear in this prominently reported – not secretive – meeting event by the state media, immediately following on the party’s celebration of its 100 anniversary in July which pledged to modernize China and rejuvenate its people, is not just the party’s determination to better its governance practices in the crackdown on big tech, financial corruption and manipulative practices of the free market.
Of larger concern – though not explicitly discussed in detail – is the knowledge that the income disparity between rich and poor in China needs to be addressed aggressively. Despite the remarkable success of the country’s anti-poverty programme, inequality in China has grown substantially. According to a Credit Suisse report, China had over 5 million US dollar millionaire households by the end of last year. In 2020, the wealthiest 1 percent of Chinese people held 30.6 percent of the country’s wealth, up from 20.9 per cent two decades ago. The lancing of this capitalist boil in China is now beginning but it is about redressal and balancing, not revolution.
How successful these moves aimed at curbing the excesses that have blighted the western model of neo-liberal economics during the past 40 years remains to be seen. The recalibration of Chinese economic policy which is aimed at strengthening the lower and middle income households shares and strengthening the socialist economy is in many ways quite unprecedented. It should be applauded rather than condemned by those supporting more inclusive, fairer and progressive global systems.
This new policy development is also happening at a time of multiple crises which the party has to deal with, arising from the excesses of the earlier reform and opening up of the economy and country, the growing corruption and abuses of power within the party’s leadership as well as by a much more hostile foreign environment today and in the foreseeable future.
However, it is a battle, which even if it achieves modest results, can point the way to another model of development that is more sustainable, more accountable and balanced, and which avoids the pitfalls of the “middle income trap” which the CCP is well aware of.
For now two small wins can be discerned. The first – the rollback of the privatisation of public services in education, elderly care and medical care – has begun with the government emphasising the importance of inclusiveness and affordability to service providers. This important battle has been one which both the traditional and new left in the US, Britain and other western countries have not been able to win.
The second on “third distribution” refers to the creation of opportunities for high-income groups and enterprises to give back to society, including through voluntary gifts and charitable donations. Fortune has reported that in the past eight months, five of China’s richest and most high-profile tech billionaires have pledged at least $13 billion of their personal or corporate fortunes to charitable foundations and initiatives. This is a sum that will surely grow.
Many countries, including the United States, grappling with how to redress the entrenched rich-poor polarization and the absence of fairness, stability and sustainability in neo-liberal ideology in their part of the world, would do well to follow China’s progress with its “common prosperity” challenge with an open and non-judgemental mind. It may lead them to perhaps even want to emulate the CCP reform policies being implemented.
- Lim Teck Ghee, a former graduate of the Australian National University, is a political analyst in Malaysia. He has a regular column, ‘Another Take’ in The Sun, one of the nation’s print media.