Common prosperity is not 'robbing the rich'

The common prosperity that China is pursuing means affluence shared by everyone, both in material and cultural terms, but not egalitarianism, a senior official said on Thursday.

Han Wenxiu, an official with the Central Committee for Financial and Economic Affairs, made the remarks at a press conference while expounding on the topic of common prosperity which has been widely discussed.

At the committee's meeting earlier this month, President Xi Jinping stressed efforts to promote common prosperity in the pursuit of high-quality development and coordinate work on forestalling major financial risks.

China has completed the building of a moderately prosperous society in all respects. On that basis, efforts are needed to make a bigger pie that will be shared in a fairer way, Han said, stressing the need to promote high-quality development, raise the income of urban and rural residents, narrow the gap of income distribution, and prevent wealth polarization.

Hard work is the fundamental pathway to common prosperity, Han said.

"We allow some people to become well-off first, who then inspire and help the latecomers. We will not opt for a robbing-the-rich-for-the-poor approach," he said.

He stressed creating conditions that are more inclusive and fair for people to get better education and improve their development capabilities, as well as shaping a development environment that provides chances for more people to become wealthy.

The official called for efforts to make basic institutional arrangements on income distribution, featuring coordinated primary, secondary and tertiary distribution. Tertiary distribution through the leverage such as taxation and social security will be conducted on a voluntary basis, he said, adding ways such as charitable donations should be encouraged to improve the income distribution structure.

Legal income should be protected but China should "rationally adjust excessively high" incomes, according to the meeting chaired by Xi earlier this month. High-income groups and firms are also being encouraged to contribute more to society.

Several tech industry heavyweights have recently announced major charitable donations and support for disaster relief efforts. Online gaming giant Tencent Holdings said this month it would spend 50 billion yuan (US$7.71 billion) to promote "common prosperity."

"More big corporations are going to set up social responsibility funds if they have yet to do so, and the size of donations from them should increase," Iris Pang, chief economist for China at ING, said in a note this week.

"Corporates need to take bigger steps to enhance their corporate governance and social responsibility. They need to work to get ahead of the regulators."

On another front, Han said recent policies regulating Internet companies aimed at irregularities and illegal behavior, "absolutely" did not target private companies or foreign companies.

The regulation aims to curb violations of laws or regulations concerning Internet platforms, including those owned by the state or with mixed-ownership, said Han. "The purpose of tougher regulation is to ensure healthier, more sustained and longer-term development," he told reporters, reiterating China's unwavering support for the non-public sector and promotion of higher-level opening-up.

Han said the prevention of monopoly and disorderly expansion of Internet platforms and other large tech firms is a global challenge, and China would handle it with equal efforts on regulation and support to their development.

While works should be done to clear the hazards from the sector's past development, ensure data security and personal privacy and protect national security and public interests, platform economy remains a key part of the advanced productive forces and should play a role in areas including resource allocation and scientific innovation, he said.