Poverty alleviation Photo:VCG

President Xi Jinping's clarion call that the Party will lead the country toward "Common Prosperity" has triggered a blizzard of commentary and cries of concern internationally, and pockets of uncertainty and speedy explanations domestically. In view of the sixth Plenary Session of the 19th CPC Central Committee, which reviewed and adopted a landmark resolution on the major achievements and historical experience of the CPC's 100 years of endeavors, it is instructive to assess Common Prosperity, which has become a new, overarching principle to guide China's new era.

Common Prosperity really is a big deal. While over-the-top foreign hyperbole that some kind of leftist revisionism is sweeping the country is a distortion, there is no doubt that President Xi is initiating a course correction for China's economic model.

Although Xi has been promoting Common Prosperity repeatedly, he crystalized it in August 2021 at the 10th meeting of the Central Committee for Financial and Economic Affairs, which emphasized that Common Prosperity is the prosperity of all people in their material and spiritual lives. It is not the prosperity of a few people; nor is it uniform egalitarianism. 

Government experts assert that Common Prosperity is the essential requirement of socialism, an important feature of Chinese-style modernization, and the common expectation of the people. They call for doing a good job of "making the cake bigger and dividing the cake well" - echoing an old, not-always-friendly debate - which means, to continue to metaphor, both "eating your cake" and "having your cake" at the same time. Channeling Deng Xiaoping's aphorism that "poverty is not socialism," Chinese thoughtful leaders encourage hard work to get rich, innovate to get rich and do not "kill the rich to help the poor."

Common Prosperity has an obvious, overt objective: reducing China's yawning wealth gap between rich and poor - a country whose Gini Index of inequality is higher than that of many capitalist countries, an awkward position for a country that calls itself socialist. The objective is laudable, even while some reactions are disconcerting to investors, like tech giants suddenly outdoing one another in pledging multi-billion-dollar charitable funds.  

But Common Prosperity has come to mean more than narrowing the wealth gap: a host of related measures to improve society and benefit citizenry, coordinated under the protective public umbrella of the new slogan. For example, tightening regulations of tech platforms to reduce monopolistic practices will facilitate smaller, innovative companies; rectifying fintech companies will reduce financial system risk; and controlling real estate leverage will ensure that houses are for living, not for speculating with borrowed funds. Preventing unfair competition and checking the "disorderly expansion of capital" - a revealing phrase - make good, long-term economic sense, and all the recent policies under the Common Prosperity banner need to be understood from this strategic perspective.

To protect its people, China is enacting pioneering regulations: assuring data privacy, especially for private citizens; protecting gig workers, such as in ride-sharing and home delivery; clamping down after-school tutoring, to relieve excessive pressures on young students and to avoid perpetuating a wealth-based class society; restricting gaming time for children to curtail addictive behaviors; and constricting "celebrity" and "fan club" culture, which is said to contradict socialist values.

To effect all these seminal policy changes, it is less disruptive to enact them in parallel; the potentially destabilizing consequences of all the economic and social changes compacted collectively are well less than if each change were dripped out one at a time, in a long series, with each change prompting debate and possible concern.  

That Zhejiang Province is the national pilot of Common Prosperity, with a 52-point plan, is no surprise. Not only is Zhejiang where President Xi served as Party secretary, it is also well along in bringing standards of living in rural areas closer to those of urban areas. The province is considering novel policies, such as collective bargaining to empower workers in wage negotiations and participation structures to enable workers to share in company profits. Moreover, Zhejiang has a history of piloting China's new policies - the "Zhejiang Model" pioneered entrepreneurship. 

Notwithstanding worries to the contrary, President Xi affirms support for private business and foreign investment. Xi will not eviscerate private business and he will support the market economy, both of which are essential for realizing national rejuvenation. The new Beijing Stock Exchange for entrepreneurial companies, especially in technology, is no coincidence.

Xi says that the government should "regulate excessively high incomes and encourage high-income groups and enterprises to return more to society." By encouraging the wealthy to be more charitable via voluntary acts indicates that the government would be careful, not confiscatory, when raising taxes on the wealthy.

Some overseas analysts question Common Prosperity's "mixed messages." To me, the message is not mixed; it has various facets, sure, but, given President Xi's political and economic mindset, and his grand goal of national rejuvenation, Xi's total message is coherent: encouraging the dynamism and innovation of private business to create incremental wealth, while, at the same time, utilizing the powers of government to bring about fair and equitable allocations of that incremental wealth.

The challenge, however, should not be underestimated. Market forces are subtle and often unpredictable. Innovation and risk-taking cannot be legislated from above. Xi stated, "We are also soberly aware that to achieve our goals of gradually realizing the Common Prosperity of all people, we must prepare for a great struggle with many new historical characteristics."

Common Prosperity is aspirational, the overarching domestic vision of what it will take to realize the great rejuvenation of the Chinese nation as the fulfillment of the Chinese Dream, thus heralding China's new era.

What we are witnessing is the full flowering of Xi Jinping's commitments to the principles of socialism, course correcting with Common Prosperity, but not changing course. 

The author is chairman of The Kuhn Foundation and recipient of the China Reform Friendship Medal (2018). opinion@globaltimes.com.cn