Chinese leader Xi Jinping has declared war on rich capitalists in a program grandly titled “common prosperity.” Given the challenges of China’s economy, he is going to have a tough time getting it off the ground.
The leadership in Beijing is attacking large companies but lacks the power or interest to alter the country’s underlying economic structure in ways that could significantly improve China’s significant income equality.
What exactly is common prosperity? Han Wenxiu, a top official in the Central Finance Office, called it doing “a good job of making the cake bigger and dividing the cake well.” The country’s new five-year plan is pushing for greater regulation of the economy, including the large tech firms like Alibaba and Tencent that have huge market power. Xinhua News Service also pointedly noted that China “must clean up and standardize unreasonable income, rectify the order of income distribution, and resolutely ban illegal income.”
The question is –
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