Income Inequality in China: Is It Time to Implement the "Common Prosperity" Policy?
 

Adham Sayed

Lebanon
 

Researcher of Zhejiang University of Commerce and Industry
 

 

The purpose of this paper is to answer the question, “Is it time to implement the "Common Prosperity" policy?” This question is based on the Former Chinese President Deng Xiaoping's 1985 speech, in which he stated that some regions and people would be allowed to become wealthy first, in order to gradually aid others in achieving common prosperity. According to available data, the first part of Deng's vision can be said to have been realized, as the income gap in China has widened since the implementation of the “reform and opening up” policy, particularly in the last five years, due to the rise of the technology and financial sectors. Is it time to start realizing the second part of Deng's vision, meaning, common prosperity? Our results suggest that income inequality in China has reached critical levels. And we have learned from the history of many countries that if policies to reduce the income distribution gap are not implemented, such as the common prosperity policy, China may face future political, economic, and social instability.