Chinese President Xi Jinping, addressing the economic inequality within the country, is set to introduce a campaign titled “common prosperity”. The poorest 20% earn 10 times less than the top 20%. In other calculations, the wealthiest 1% holds 31% of China’s wealth, according to a Credit Suisse report. This hasn’t changed much since 2015.
The ruling Communist Party, headed by President Jinping, came into force in 2012. The party has, since then, tried to moderate the financial sector by ensuring an expanding middle class instead of the elites. Discussing strategies targeting the upper class, Communist Party’s Central Committee for Financial and Economic Affairs officials spoke about “strengthening regulation and adjustment of high income, protecting legal income, reasonably adjusting excessive income, and encouraging high-income groups and enterprises to give back to society more.”
China has seen a massive boom in the technology domain of late. These tech giants, mostly billionaires, have surpassed the number of rich Americans in 2019. The private sector seems to be growing while the poor remain just that – poor. The rich who opposed this redistribution only found themselves in more trouble. Chinese billionaire Jack Ma recently reported missing, criticised the government’s financial regulators. Ma’s Ant Group had listed a public offering of $37 billion and was cancelled immediately after. To avoid paying exorbitant taxes, billionaires are suddenly feeling more charitable.
In late April, three state entities claimed a 1% and board seats at a Beijing subsidiary of ByteDance, the parent company of TikTok.
China may also introduce property and inheritance tax, therefore taking away a significant sum from the richest.