A Goal for the World

Capitalism and socialism fought it out in the Cold War and after the fall of Soviet Russia, it might seem that capitalism emerged as the one ideology that is truly successful. It is successful, yes, but only to some and in wildly differing degrees- concentration of wealth by a select few is a shining example. The richest 1% own 43% of the world’s wealth, says a Credit Suisse report.

An exception to the capitalistic spread is China, which follows what is called Chinese socialism, which is in some sense a mix of calibrated capitalism and state control. Though ideologically tagged as socialism, extremities of wealth and poverty are not unseen in China. And this is exactly what the Chinese Communist Party (CPC) seemingly wants to target. It advocates for an olive shaped societal income distribution, where lesser and lesser people are at the fringes of poverty and wealth. In other words, this means that the middle class outweigh the rich and the poor. Accordingly, Mr. Xi Jinping has renewed the CPC’s focus on “common prosperity”, envisioned to narrow the yawning gap between the different economic classes.

As the Tamil adage goes “Ore kallu la rendu maanga” or as does the alternative in English “To kill two birds with one stone”, “common prosperity” achieves more than one purpose. First, it provides a solution to the moderating economic growth of China. The Chinese engine, thriving on investment and export, is looking to shift towards consumption. A consumption based economy flourishes only when a majority of the population has sufficient spending power. Common prosperity might just hit the bulls eye here.

Second, it helps rein in larger than life private enterprise which is seen to have amassed a little too much of clout in the internet era. Xi has initiated a crackdown aimed at some of the most successful companies in China like Alibaba, Tencent and Meituan. He has also indicated that it is time for these mammoth companies to pay their share. Since then, Alibaba and Tencent have made announcements of plowing $15B each to further the “common prosperity” agenda.

It feels like a brilliant step in the right direction. Though the true intentions behind the second line of reasoning may be convoluted, no one wants all powerful tech companies. They already control half our mind share and more of our time share. On the other hand, if policies end up in wealth redistribution, yes, give me more!

The CPC does not run a democracy and has its share of controversy but some of its policies are worth noting. With income inequalities burgeoning after the COVID waves and the brunt of climate change being disproportionately borne by poorer countries, “common prosperity” should be a goal for the world, not just China.