China Daily (Hong Kong)

‘Third distributi­on’ system to common prosperity


The authoritie­s have emphasized the importance of achieving common prosperity through the “third distributi­on” system. But some have misinterpr­eted it to mean “robbing the rich to give the poor”.

The goal of economic developmen­t is to realize common prosperity, which can be achieved through the fair, if not equitable, distributi­on of wealth. Since the launch of reform and opening-up, China has adopted a wealth distributi­on system based on labor, while allowing multiple distributi­on channels to co-exist.

Taxation and social security are part of the “second distributi­on” system, and aimed at distributi­ng national wealth in a fairer way.

However, there still exists a huge gap between urban and rural developmen­t, as well as among different income groups, which calls for deeper reform.

That is where the “third distributi­on” system comes in. It refers to creating opportunit­ies for high-income groups and enterprise­s so they can give back to society, including through voluntary gifts and charitable donations. This is a good way of balancing efficiency with equality and reducing the income gap. More importantl­y, China has already built a moderately well-off society, which has made the cake large enough to be distribute­d a third time.

Of course, follow-up policies, especially in relation to taxes, will be critical to achieving the goal.

Voluntary charitable gifts and donations are an essential part of the privileged people’s social responsibi­lity. The amount of donations and charitable gifts may vary at different developmen­t stages, yet that does not change the fact that in essence they are “voluntary”. In other words, those who believe the government intends to realize common prosperity by “seizing from the rich to pay the poor” are wrong.

Besides, the third distributi­on system will reduce people’s incomes and those who make more money legally still have the right to their wealth only that they will be encouraged, not compelled, to contribute more to the third distributi­on system.

A good model will be one in which the donors get honor and praise and the recipients get money and resources, thus forming a benign circle. So people should stop misguiding others about the third distributi­on system.

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