Interesting article in QS where Xi explains reasons behind the "common prosperity" drive: 1. Taking the promotion of common prosperity for all people as the focus of seeking happiness for the people, and constantly consolidating the foundation of the party’s long-term governance;
2. High-quality development requires high-quality workers. Only by promoting common prosperity, increasing the income of urban and rural residents, and enhancing human capital, can we increase total factor productivity and consolidate the foundation for high-quality development.
3. The problem of global income inequality is prominent. Some countries are divided between the rich and the poor, ...leading to social tearing, political polarization & populism. China must resolutely prevent polarization, & achieve social harmony & stability.
so how to achieve this? Xi laid down the following principles: 1. everyone has to take part in, avoiding "involution" and "laying flat".
2. Adhere to the basic economic system. Public ownership is the mainstay & plays important role in promoting common prosperity, at the same time promote the healthy development of the non-public economy and the healthy growth of people from the non-public economy.
"healthy"...
3. Don't try to raise your appetite & make promises that cannot be fulfilled. The government can't pay everything. Don't fall into the trap of "welfare states" and raise lazy people.
4. "Common prosperity" can't be achieved overnight. It will be with us for a long time.
& now some practical advice: 1. "Coordinated development of finance and real estate with the real economy". So the days of big profits for big banks and developers are over?
2. "Attract more high-quality talents to join the team of skilled workers". Good news for college graduates!
3. "Adhere to the positioning that the house is used for living, not for speculation, rent and purchase at the same time, implement policies in accordance with the city, and improve the long-term rental policy".
More bad news for the developers?
4. "Strengthen the regulation and adjustment of high income".
How? income tax, capital tax, property tax, consumption tax.
So what exactly constitutes "excessively high income"? I tweeted this 2 months ago:
& this part is so loaded:
"We have a complete solution to the problem of poverty, but we still need to explore and accumulate experience on how to get rich. It is necessary to protect property rights and intellectual property rights, and protect legal wealth".
"We must resolutely oppose the disorderly expansion of capital, draw a negative list for access to sensitive areas, strengthen anti-monopoly supervision. At the same time, we must mobilize enthusiasm of entrepreneurs to promote the healthy development of various types of capital"
5. "Promote the common prosperity of the people's spiritual life", in line with the drive for “online civilization" that I discussed in @china_neican earlier this month. neican.org/p/civilizing-c…
6. "Accelerate the industrialization of agriculture" and "revitalize rural assets", which is coded language for lifting the restrictions on sale of rural land.
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The answer is found in Art. 2, which states that the key to the work promoting the development of private economy is to “ensure its correct political direction”.
Ban on forced transfer of source code is one of the key obligations in the CPTPP. It has long been regarded as one of the main obstacles for China’s accession, with many claiming that China would never accept the obligation.
But this changed today with a State Council document.
In this document called “Notice of several measures to promote institutional opening-up in free trade pilot zones and pilot free trade port in line with the international high standards”, the State Council states that the relevant authorities shall not
“require the transfer of, or access to, source code of software owned by a person of another Party, as a condition for the import, distribution, sale or use of such software, or of products containing such software”, which is language copied verbatim from the CPTPP.
China adopted its first Foreign Relations Law yesterday.
Why the law now & what are the implications for foreign businesses? I explained in this @SCMPNews story.
‘Rule of law’: China adopts new legislation to help combat foreign sanctions via @scmpnewssc.mp/kiqq?utm_sourc…
In addition to my quotes along with @georgemagnus1 below in the story, I'd like to point to the following features of the law which will make it harder for businesses, both Chinese and foreign, to operate:
@georgemagnus1 1. Art. 5 emphasizes the central unified leadership of the CCP, which adds further to the uncertainty of the business environment as the Party could take actions based on political rather than legal considerations.
Key changes in the State Council Working Rules: 1. The guiding thoughts section deleted all previous references to Marxism, Leninism, Mao, Deng, Three Represent, & Scientific Development Outlook, and keeps only XJP Thoughts on Socialism with Chinese Characteristics in the New Era
2. All major decisions and problems MUST be reported to the CCP Central Committee first.
3. All State Council members shall resolutely implement the decisions of the Party Central Committee, and refrain from speech and behavior that contradicts the decisions of the CCP Central Committee.