GUANGZHOU, China, Dec. 8, 2021 /PRNewswire/ — As China is reforming its economic model by promoting common prosperity, economic experts at the International Finance Forum (IFF) 2021 shared their insights into the country’s objective that is aimed at further closing the wealth gap between the rich and poor, leveling opportunity for social advancement, and reducing social inequalities.
China’s common prosperity goals include the government’s priority shift from growth efficiency to fairness, tertiary distribution, as well as the balance between economic growth, sustainability and social justice.
Huang Qifan, Chairman of the IFF Academic Committee and Professor at Fudan University, pointed out that it is a moral and economic imperative to achieve common prosperity as a yawning wealth gap leads to a polarized social-class structure, stagnant economy and weak social stability, thus causing the nation to plunge into low-efficiency equilibrium. The answer to potential risks is to enlarge the middle-income group.
Despite government vows to place more emphasis on fairness, growth remains an essential component of China’s economic development goals, he said. The measures for common prosperity should be based on the current social and economic reality, meaning that it takes long-term incremental efforts to achieve the end goal.
Liu Shijin, Deputy Director of the Economic Affairs Committee of the National Committee of the CPPCC, said the solution to rein in the wealth gap and enhance social equity lies in policies to improve basic public services and earnings for those in low-income groups and support the development of small and medium-sized enterprises.
Huang Qifan explained that China will establish institutional structures that coordinate the three domains of distribution — primary, secondary and tertiary — in a bid to achieve common prosperity. Primary and secondary distribution can be realized by income and taxation policy, while tertiary distribution is achieved through philanthropic activities and individual and organizational responsibility. In China, around one-third of tertiary distribution is devoted to education, especially in rural areas, in an effort to help migrant workers and village doctors ramp up their skills.
Zhu Xian, Vice President and Secretary General of IFF and Former Vice President of World Bank, noted that to balance efficiency and fairness is a question that governments all over the world may face, and he hopes that China’s innovative way to tackle the problem will contribute to international economic development.