China created more billionaires than the United States Now it strikes. | MCUTimes

China created more billionaires than the United States Now it strikes.

Communist China has relentlessly pursued economic growth for decades, creating more billionaires than the United States, lifting 800 million people out of poverty, but leaving another 600 million to live on $ 150 a month.

Now, Mr President Xi Jinping planning what some experts say would be a dramatic face trying to restructure Chinese society by cracking down on the country’s newly minted super-rich and redistributing wealth more evenly among the population of 1.4 billion.

The operation involves plans to “regulate excessive incomes” and “encourage high-income people and businesses to return more to society” according to a reading of Xi’s comments at a meeting of the Chinese Communist Party of the state-run news agency Xinhua.

While his slogan of “common prosperity” was hardly new among Chinese leaders, Xi’s speech last month was the strongest example of his apparent plan for a reshaped society.

Some experts believe that for the party, there is a self-preserving rationale behind the goal of better income. For years, the Communist Party has set its legitimacy for growth that has surpassed any other major economy; now that it’s slowing down, it may feel like it has to offer a new promise: equality.

Women looking at bags in Louis Vuitton’s flagship store Shanghai.China Photos / Getty Images file

“The Chinese government is aware that both domestic and international audiences are watching,” said Austin Strange, assistant professor of politics at the University of Hong Kong. “This is an opportunity to present itself as a forward-thinking government that cares about its citizens, including those near the bottom of the wealth distribution.”

As part of the Communist Party’s comprehensive vision for the future, the government has enforced a legislative intervention against Chinese tech giants which sent Western financial markets into motion.

But the effort extends beyond the economy, including everything from restriction of video game hours for minors, to try to eradicate a fan culture that sees teenagers “blindly idolize celebrities”, as the hawkish, party-controlled newspaper Global Times put it last week.

This message resonates with Cao Xinyin, 19, a university student in Beijing whose demographic-university-educated urban-communist party is eager to hold on to his side.

“Common prosperity means everyone can live a high quality life,” she said. “People will live a healthier life, be better behaved, have a happier mood and will be more likely to pursue and realize their dreams.”

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Others, however, are not convinced.

Shaun Jiang, 28, the former owner of an education firm in the southwestern city of Chengdu that recently closed, said common prosperity was nothing more than a political slogan that lacked “a clear roadmap and feasibility.”

Either way, Xi’s is an unprecedented attempt to control the market, according to Bill Bikales, an economist in New York who spent years in China working on economic policy at various UN agencies.

“It’s a pretty extraordinary situation,” he said. “The surprising thing is to what extent Xi believes the market’s role can be limited and limited and limited again.”

Political legitimacy at stake

Xi’s recent efforts for state intervention may seem surprising to a one-party communist state. But since the 1970s, China has turned away the Marxist zeal of former President Mao Zedong and embraced reforms that opened up its economy and helped transform it into today’s global powerhouse.

An apartment complex in Chongqing, the largest municipality in southwest China.Zhou Zhiyong / AP file

More than 800 million people have been lifted out of extreme poverty since 1978, according to the World Bank, and more than half of the population is now considered middle class. As of last year, 1,058 billionaires lived in China against 696 in the United States, according to Hurun report, a Shanghai-based organization that tracks China’s wealthy people.

But even if forecasts predict China’s economy could overtake the United States in size as early as 2028, the country also has one of the highest levels of income inequality in any major world economy.

About 600 million people – almost double the US population – still live on the equivalent of about $ 150 a month, Chinese Prime Minister Li Keqiang said last year.

“The wealth gap has been quite severe in China,” said Jiangnan Zhu, an associate professor of politics at the University of Hong Kong.

China was the only major economy to expand last year, having largely eliminated coronavirus after it was first discovered there in late 2019. But in recent years, there has been an overall slowdown in the country’s stratospheric economic growth, which had been a “crucial pillar of the political legitimacy of the Chinese Communist Party,” according to Strange at the University of Hong Kong.

Now that “the era of rapid economic development is over,” said Ryan Hass, a senior fellow in the think tank at the Brookings Institution in Washington, “the Chinese leadership is shifting its focus toward improving quality of life issues as a new source of achievement legitimacy.”

Meanwhile, Beijing is under growing criticism from abroad over a wide range of issues, including its growing military activity around Taiwan, tighter grip on Hong Kong and treatment of Uighur Muslims, which the United States and others have described as genocide.

A child eats a snack in his temporary 290-square-foot studio apartment in Hong Kong. Pushed into the small temporary apartment, her family struggles to make ends meet in the notoriously odd city.Anthony Wallace / AFP via Getty Images

Some technology giants have responded to the government’s regulatory breakdown by promising money for philanthropic social programs. One of China’s largest companies, Tencent Holdings Ltd., has pledged about $ 15 billion to a range of initiatives covering everything from the environment to education and rural reforms to technological assistance to senior citizens.

Tencent said the move was a direct response to “China’s campaign to redistribute wealth.”

Alibaba Group Holding Ltd., another Chinese tech giant, pledged a similar amount on Thursday.

Along with a renewed tax and welfare system, Xi may be planning to use this type of large-scale charitable donation as a key driver for its reforms, said Vivian Zhan, associate professor of politics at the University of China in Hong Kong.

The Communist Party has “many political tools to regulate large corporations and mobilize resources from them for redistribution and other political goals,” she said.

But the common prosperity still faces other challenges such as corruption, the eradication of which has been the focus of a year-long campaign by Xi. More than 60 percent of Chinese still believe that corruption is a major problem, according to Transparency International, a non-profit organization based in Berlin.

“Common prosperity is a good idea, nice to hear but hard to realize,” said Qin Guiying, 52, who used to work as a farmer in Sichuan province but now works at a car wash in Beijing.

“The biggest problem is corruption of local officials,” she added. “I believe the rich people will remain rich, while the poor will remain poor because of corruption.”

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