China’s “common prosperity” drive is not a pursuit of egalitarianism, President Xi Jinping said in a rare international defence of the policy that rattled markets from Hong Kong to New York last year.
Xi, often described as China’s most powerful leader since Mao Zedong, was speaking via video link at the World Economic Forum’s annual meeting. The event is being held online this year, rather than at the Swiss resort of Davos.
“The common prosperity we desire is not egalitarianism,” Xi said. “We will first make the pie bigger and then divide it properly through reasonable institutional arrangements. As a rising tide lifts all boats, everyone will get a fair share from development, and development gains will benefit all our people in a more substantial and equitable way.”
Under the policy, spearheaded by Xi, the Chinese Communist party has been reshaping the country’s business and cultural landscape via a months-long series of crackdowns. This has targeted industries including fintech, education and entertainment as well as perceived societal ills such as celebrity culture, gaming and effeminate fashion trends.
The moves, which have wiped billions of dollars from Chinese and foreign investors, have sparked international debate over the political and economic motives of the policy, and made the future of investing in China uncertain.
Xi tried to ease some concerns, insisting to the Davos audience that China remained committed to being open to foreign business.
“All types of capital are welcome to operate in China, in compliance with laws and regulations, and play a positive role for the development of a country.”
The speech comes as China faces criticism for eroding democratic freedoms in Hong Kong, mistreating the Uyghurs of Xinjiang and posturing expansively in military affairs. In response, Beijing regularly rebukes the US and its allies and partners for interfering with China’s domestic interests.
On the global economy, the Chinese president warned of “serious negative spillovers” if “major economies slam on the brakes or take a U-turn in monetary policies” as they grapple with accelerating inflation. Developing countries would also “bear the brunt” of the changes.
Problems with industrial supply chains, tight energy supplies and rising commodity prices also posed challenges, he cautioned. “These risks compound one another and heighten the uncertainty about economic recovery,” he said.
“The global low-inflation environment has notably changed, and the risks of inflation driven by multiple factors are surfacing,” he added.
On the Covid-19 pandemic, Xi said countries should “fully leverage vaccines as a powerful weapon, ensure their equitable distribution, quicken vaccination and close the global immunisation gap”.
“Strong confidence and co-operation represent the only right way to defeat the pandemic,” he said. “Holding each other back or shifting blame would only cause needless delay in response and distract us from the overall objective.”