Media  Foreign Affairs and National Security  2021.10.06

Is the Chinese Communist Party returning to the 'communist' path?  ~China's income inequality may be forcing Xi's hand~

the japan times on September 24, 2021

International Politics/Diplomacy China

Tokyo is seeing something extraordinary unfolding in China. Successful IT companies, for-profit tutoring schools, celebrities in the entertainment world and other figures or firms considered to be wealthy are being clamped down upon under the government’s new so-called “common prosperity” push.

Technology and IT giants Alibaba Group, Tencent and ByteDance reportedly doled out more than 200 billion Chinese yuan in donations to education and employment promotion funds. A famous star was abruptly removed from the cast credits of her movies. A popular actor was ordered to pay heavy fines for tax evasion.

Many in Tokyo were bewildered when Alibaba co-founder Jack Ma disappeared for a few months in 2020-2021. Later it was learned his disappearance coincided with a regulatory crackdown on his businesses. Until recently, however, Tokyo had no clue about the real reasons behind the crackdown — which is signified by Xi Jinping’s new common prosperity policy.

What is “common prosperity”?

When I was stationed in Beijing from 2000 to 2004 as the information and cultural minister at the Embassy of Japan, there were already rich Chinese about, but hardly any super-rich. Many people at the time seemed to enjoy a decent life. Over the past two decades, however, the economic prosperity gap has widened in China.

To address a sense among the public that economic unfairness is a growing problem, President Xi, who is also the head of the Chinese Communist Party (CPC), announced the common prosperity policy on Aug. 17, which seeks to correct the country’s income disparity. The following are the main pillars of his new policy.

  • Guarantee a national minimum standard of living
  • Promote redistribution to reduce inequality through the three areas of income, taxation and donations
  • Balance regional development and foster small and medium-sized enterprises
  • Liquidate unreasonable income and correct the order of income distribution. Crack down on illegal income while protecting property rights, intellectual property and legitimate wealth
  • Equalize public services such as pensions and health care
  • Improve living conditions in rural areas

“Achieving common prosperity is not just an economic issue,” said Xi as early as in January 2021. “It’s a major political matter bearing on the party’s foundation for rule. We cannot let an unbridgeable gulf appear between the rich and the poor.”

When he announced the new policy in August, he also said: “We must make the common prosperity of all the people the focus of our efforts to realize happiness of the people and to constantly lay the foundation for the Party’s long-term governance.”

Now we know the real reason why those celebrities were abruptly harassed and fined. Those IT giants donated fortunes not out of some sort of goodwill but rather to ensure their own political survival. Common prosperity, it seems, is just another tactic to regain the legitimacy of the Communist Party.

A return to communism?

The concept of common prosperity is nothing new. It was first proposed by Mao Zedong in 1953. It was also the final goal of Deng Xiaoping’s “wealth first” theory that he advocated in the 1980s — a Chinese version of trickle-down economics.

A Western survey found, however, that the share of wealth held by the top 1% of China’s richest rose from 20.9% in 2000 to 31.5% by 2015. Such disparity is worse than in the United States. Unless this issue is properly addressed, public dissatisfaction may eventually boil over.

With a strong sense of urgency, Xi launched the policy of common prosperity.

All of this gives the appearance that the CPC, which has been promoting capitalism for decades, is trying to return to the basic principles of socialism, becoming for the first time a party true to communism. Or is it?

First- and second-class citizens

Even in the early 2000s in mainland China there were economic gaps that already existed, not only between the rich and the poor, but also between the cities and the rural farming villages, and between the coastal and inland provinces.

This shows that there are two kinds of citizens in China. The “first-class citizens” are rich, living in the cities, many of which are located along the eastern coast of the country. The “second-class citizens,” however, are poor, residing in rural areas, many of which are located inland.

In truth, the CPC has never been a party of communism. It started as a party of armed revolutionary struggle. Then it became a party of Mao Zedong who knew more about ancient Chinese history than communism. By the time he died in 1976, China had been completely devastated.

Since the 1980s, when Deng Xiaoping began his open-door policy, China has become a primitive capitalist country where the first-class citizens living in the coastal cities exploit the second-class citizens coming from the countryside. This has been the China that I know.

A new Cultural Revolution

Some in Tokyo even wonder if Xi wants to bring back China’s great Cultural Revolution (1966-1976). During that decade, intellectuals, artists and capitalists suffered amid the mass mobilization of a personality cult dedicated to the dictator Mao.

That said, I do not believe that Xi wants to launch a new Cultural Revolution in the 21st century. There is no denying that there are similarities between now and then, and there surely are some elements of a power struggle between Xi and his political rivals.

But Xi’s primary concern is to ensure the survival of the CPC, which he inherited from his father’s generation of revolutionaries. Does this mean that the Chinese Communist Party has finally started exercising true communism? Hardly.

Xi Jinping must be serious about legitimizing the CPC given the introduction of socialist and/or communist measures to address the public’s concern over economic fairness.

Unfortunately, however, he is probably doomed to fail. That’s because he is trying to change the hearts and minds of the Chinese people, who are essentially political merchants by nature — and therefore, will never believe in socialism or communism of any sort. Good luck to President Xi, Tokyo will keep its fingers crossed.