BEIJING, Oct 15 (Reuters) – Chinese President Xi Jinping warned of the danger of the government exceeding its social welfare promises as it strives to achieve “common prosperity” by mid-century. while demanding advances on the long-awaited property tax, which could help reduce wealth gaps.
China, which remains a nominally socialist country, has vowed to reduce inequality after years of breakneck growth, while insisting that people must continue to work hard to create wealth.
In an article published by the official Xinhua news agency in the Communist Party magazine Qiushi on Friday, Xi also called on China to “move vigorously and steadily” on property tax legislation.
China has been studying such a tax for more than a decade, but is facing resistance from stakeholders, including local governments themselves, who fear it will erode property values or trigger a sharp decline in financial markets.
This tax could curb rampant speculation in the housing market, which is currently under scrutiny on the world stage due to the debt crisis of property developer China Evergrande Group.
Xi also warned of the danger of the government making too many promises on social welfare, amid a push to achieve what he called “common prosperity” by mid-century.
The “common prosperity” is a campaign to reduce the gap between rich and poor. It has led to a wave of regulatory measures against excesses in sectors such as technology and private education.
China became an economic powerhouse after reforms carried out last century under a hybrid policy of “socialism with Chinese characteristics”, but it also deepened inequality, especially between urban and rural areas, a gap that threatens social stability.
The gap between the population’s income and consumption should be reduced to a “reasonable range” by mid-century, Xi said.
However, Xi also said that the government should not make promises that it could not keep and avoid the “trap” of “welfareism” and help the lazy.
While the “ossification” of social classes should be prevented, “lying down” should also be avoided, an attitude adopted by Chinese youth that embraces passivity and withdrawal from the intense competitiveness characteristic of the world’s second largest economy.
“Due to their social systems, some developed countries have not solved the problem of common prosperity, and the gap between rich and poor has become increasingly serious,” Xi said.
He also said that the salaries of low-ranking civil servants and workers in state-owned companies should be increased.
(Reporting by Gabriel Crossley; edited by John Stonestreet, translated by José Muñoz in the Gdansk newsroom)
