Bigger, better cake must be divided more fairly

Common prosperity is a longterm goal that due to its complexity cannot be realized with the marvelous “China speed”.

At present, China’s household disposable income accounts for a relatively low proportion of its GDP, around 42 percent, compared with the world’s average of 60 percent to 70 percent. That directly weakens the people’s spending power and the country’s domestic demand.

The country has to overhaul its social wealth distribution system that has largely remained untouched for too long under the guiding principle of “allowing some to get rich first so that they can lead the rest to achieve common prosperity at last”. However, the reality is that with some people having become rich first, the wealth gap is widening rather than common prosperity being achieved.

The high-quality development the country pursues so far mainly focuses on economic restructuring, improvement of market rules and modernization of the governance system. Policymakers must ensure that high-quality development includes overdue reforms of the social wealth distribution system.

The antitrust investigations into the internet giants are part of the efforts to level the playing field of market competition. That the owners of these companies are billionaires does not mean the antimonopoly probes into their businesses represent the State robbing the rich to assist the poor.

China should continue to adhere to the principle of making the cake bigger and dividing it fairly at the same time. The new distribution mechanism should balance efficiency and fairness. Compared with before, it should attach more significance to fair competition and encourage people to get rich through hard work and innovation. It should protect legitimate income in accordance with the law, prevent social polarization, and eliminate the institutional space for unfair wealth distribution.

In the past, illegal income such as power-for-money trading, insider trading, stock market manipulation, financial fraud and tax evasion occurred frequently. Now the authorities must ban illegal income, regulate unreasonable income, reasonably adjust excessive income, and establish a fair and law-based income distribution system. These endeavors will necessarily touch the cheese of the rich, but only the illegal and unfair parts of it.

Meanwhile, the authorities should step up their efforts to adjust taxation, strengthen social security and transfer payments, and promote equal access to basic public services. These are the foundations of the wealth distribution system of a modern state.