China’s Innovative Practice of Common Wealth

Abstract

From the practice of socialist modernization since the founding of the People's Republic of China, all the people have gained unprecedented improvements in economic and social welfare in the course of the country's economic development at different stages of development, and common prosperity has always been the basic guideline of the Communist Party of China in its governance. However, the way of realizing common prosperity, the degree of its realization and the form of its manifestation have been inherited and varied at different stages of development.

From the practice of socialist modernization since the founding of the People's Republic of China, all the people have gained unprecedented improvements in economic and social welfare in the course of the country's economic development at different stages of development, and common prosperity has always been the basic guideline of the Communist Party of China in its governance. However, the way of realizing common prosperity, the degree of its realization and the form of its manifestation have been inherited and varied at different stages of development.

From the perspective of China's actual situation and international comparison, China has gone through different stages of development, presenting the regular characteristics of socialist modernization, i.e., the long-term process from quantitative change to partial qualitative change (phased), and then quantitative change to qualitative change again. As the three periods summarized in the Resolution of the Sixth Plenary Session of the 19th CPC Central Committee, the period of socialist revolution and construction, the new period of reform, opening up and socialist modernization, and the new era of socialism with Chinese characteristics, the great achievements of economic and social development have formed three consecutive and interlocking historical leaps.¹ In the history of China as well as in the history of contemporary world development, we have continued to create two major miracles of rapid economic growth and long-term social stability, and have built a well-off society in all aspects.²

3.1 The Socialist Revolution and Construction Period

The Resolution of the Sixth Plenary Session of the Nineteenth Central Committee of the CPC pointed out that the main task facing the Party during the period of socialist revolution and construction was to realize the transition from new democracy to socialism, carry out socialist revolution, advance socialist construction, and lay the fundamental political premise and institutional foundation for the great rejuvenation of the Chinese nation.³

At the beginning of the founding of the People's Republic of China, defending the new regime and winning the country's independence was the primary historical task of the Chinese Communist Party. This objectively also required China to start an unprecedented industrialization construction, especially to establish the foundation of basic industrial system and defense industry through heavy industrial projects, and to establish a socialist economic system under the conditions of extremely backward economy and extremely weak industrialization foundation.

First, the land reform, which completely abolished the feudal land system, greatly liberated the rural productive forces and enabled the vast majority of peasants to own their land, greatly motivating them to produce, and agriculture recovered and developed rapidly as never before. By 1952, the country's total grain production had increased by 44.8% compared to 1945 and also exceeded the highest production of 18.1% before the founding of New China, directly benefiting the vast majority of poor peasants. 1953 net monetary income of peasants increased by 123.6% compared to 1949, doubling the income level of peasants and increasing the retained grain of peasants by 28.2%.⁴ This groundbreaking land reform liberated hundreds of millions of peasants for the first time (the rural population was 490 million and the agricultural labor force was 173 million), which can be called the first liberation of Chinese peasants.

After the founding of New China, the Gini coefficient has been significantly reduced. After years of internal and external wars, earth-shaking revolution, land reform, and socialist transformation benefiting hundreds of millions of people, the inequality of primary distribution in New China has greatly improved. The Gini coefficient has dropped from over 0.56 at the founding of New China to around 0.27 before the reform and opening up,⁵ a fairly low level among countries with data worldwide.

Second, the three major transformation tasks were completed ahead of schedule, eliminating exploitation in China and greatly liberating the social productive forces. At constant prices, by 1957, China's gross national product had increased by 55.7% over 1952, of which the primary industry grew by 20.6%, the secondary industry by 144.4%, the tertiary industry by 153.2%, and the national consumption level by 24.5%,⁶ establishing the foundation of the socialist economy.

Under the planned economy system, out of the urgent need to accelerate industrialization, the construction of industrialization was once impetuous and adventurous, and through the campaign mode of development led to economic policies deviating from the laws of economic development, launching the “Great Leap Forward,” the People's Commune Movement and the “Cultural Revolution,” The “Great Leap Forward,” the People's Communization Movement and the “Cultural Revolution” caused major economic and political shocks and several negative growths in the level of consumption of the population (1959–1961, 1968, 1974),⁷with the economic growth rate significantly lower than the potential growth rate (around 9%). In constant prices, the average annual growth rate of GDP was 5.9% from 1952 to 1976,⁸ with a loss of at least 3.1 percentage points; from 1952 to 1978, the per capita consumption growth rates of urban and rural residents were 3.0% and 1.8%, respectively, and in fact the relative gap between urban and rural residents’ per capita consumption expenditures is widened. At current prices, it widened from 2.37 times in 1952 to 2.93 times in 1978.⁹ During this period, the people generally lived below the poverty level or low-income level, and the annual per capita consumption level of the nation's residents in 1976 was only 171 yuan, which was not rich at all, let alone common prosperity. On the whole, during the planned economy, the level of national residents’ consumption expenditure was still significantly improved relative to the previous historical stages, increasing by 65.6% in constant prices compared to 1952.¹⁰

During this period, despite the negative effects of egalitarianism in the economic sphere on economic development, great and unprecedented progress has been made in promoting equity in the social sphere, creating opportunities for equitable development for the people, and creating a human capital dividend for reform and opening up. For example, China's vigorous development of education, the eradication of illiteracy among young adults, and the establishment of cooperative medical care in rural areas not only promoted social equity and justice, reflecting the superiority of the socialist system, but also laid the foundation of human capital for the rapid economic growth achieved after the reform and opening up.¹¹

Overall, the period 1949–1978 was a very low-income phase of the country's development, with GDP per capita rising from $119 in 1952 to $385 in 1978,¹² with significant progress in economic development, albeit below potential growth rates. In terms of purchasing power parity (PPP) 2017 international dollars,¹³ it rose from 212 international dollars to 600 international dollars, an increase of 2.83 times, with an average annual growth rate of 4.1%, significantly higher than India's 1.7% during the same period¹⁴; national revenue capacity has increased substantially, with general public budget revenue rising from 25.6% of GDP in 1952 to 30.8% of GDP in 1978.¹⁵ Not only was it conducive to promoting the industrialization of the country, it was also conducive to investing in human capital for the entire population. Before 1949, China was a populous country filled with illiterates, with 90% of the country's population being illiterate or semi-literate, and only about 20% of urban school-age children enrolled in school. It was estimated that in 1950, the average number of years of education for the population over 15 years old was only about 1.0. As a result of vigorous nationwide literacy campaigns and accelerated development of primary and junior high school education as well as high school and university education, the net enrollment rate of primary school-age children increased from 25.0% in 1949 to 94.0% in 1978, and the gross enrollment rate at the junior high school level increased from 3% to over 50%. According to Angus Maddison estimates, the average years of schooling for the population aged 15–64 rose from 1.6 years in 1950 to 4.09 years in 1973, with an average annual growth rate of 4.2%. from 1952 to 1978, the average annual growth rate of factor investment in education was as high as 4.49%, higher than Japan's 1.19% in the same period, which is related to the fact that the per capita level of education in Japan was much higher than that in China in 1952, which is equivalent to more than five times of the per capita level in China.¹⁶ It is estimated that the average number of years of education for the population over 15 years of age rose from 1.0 in 1950 to 4.8 in 1978, an increase of 4.8 times, with an average annual growth rate of 5.8%, significantly exceeding the growth rate of GDP per capita (4.1%), a record in Chinese and world history; life expectancy per capita rose from 35 years before the founding of New China to 65.9 years in 1978 (see Table 3.1), much higher than India's 52.8 years and higher than the world average (62.2 years), setting a historical record for the increase in life expectancy per capita in China and the world. This great achievement fully reflects the superiority of the socialist system and the universality of social equity, and has laid the most important foundation of human capital (especially education and health) for the reform and opening up.

Table 3.1 Major development indicators in China (1952–2020)

Practice has shown that the establishment of the socialist system has opened up a path to common prosperity in China. The Chinese people have since stood up and created a fairer society than at any time in modern history, with the masses of the people, especially the workers and peasants, gaining the status of masters of society.¹⁷ This was the first step toward common prosperity in China, the era of institutional foundation for eliminating political inequality and social inequality.¹⁸

In short, the Chinese Communists, represented mainly by Comrade Mao Zedong, “laid the fundamental political prerequisites and institutional foundation for the great rejuvenation of the Chinese nation” and “achieved the most extensive and profound social transformation in the history of the Chinese nation, realizing the great stride of a poor and populous Eastern country into a The great leap into socialist society.”¹⁹ During the period of socialist revolution and construction, Mao Zedong left the world not only valuable historical experience but also profound historical lessons in terms of the theory and practice of exploring the laws of socialist development. In this regard, the Resolution on Certain Historical Issues of the Party Since the Founding of the People's Republic, adopted at the Sixth Plenary Session of the Eleventh Central Committee of the Party in June 1981, realistically evaluated the historical status of Mao Zedong in the Chinese Revolution, fully affirmed the great significance of Mao Zedong Thought as the guiding ideology of our Party, and especially affirmed the gradual establishment of the correct path for building a modernized and strong socialist country suitable for China's situation since the Third Plenary Session of the Eleventh Central Committee of the Party, further specifying the correct path for building a socialist modernized and strong country. It has further pointed out the direction of our social undertakings and the work of the Party to continue to move forward, opened a new stage of continuing to explore the innovative road of socialism with Chinese characteristics, and gradually laid the foundation of the socialist system, economic foundation, and social foundation for the realization of common prosperity.

3.2 The New Period of Reform, Opening Up and Socialist Modernization

The Resolution of the Sixth Plenary Session of the 19th CPC Central Committee points out that the main task facing the Party in the new period of reform, opening up and socialist modernization is to continue exploring the right path for building socialism in China, liberating and developing the social productive forces, freeing the people from poverty and making them rich as soon as possible, and providing vigorous institutional guarantees and material conditions for rapid development to achieve the great rejuvenation of the Chinese nation.²⁰

At the beginning of reform and opening up, China's basic national condition was still a large population, a thin base, and a per capita GNP that still ranked behind the world.²¹ In 1978, China's per capita GNI was US$200 (current price), which was only 10.4% of the world average per capita level (US$1929), ranking 175th among 188 countries and regions in the world, and in the last 6.9% position in the world.²² China accounted for 22.3% of the world's population,²³ with the largest rural population in the world, totaling 790 million people, accounting for 29.8% of the world's rural population, 1.52 times the share of India in the world (19.7%).²⁴ China is also the country with the largest number of poor people in the world. According to the low international poverty line of less than 1.90 international dollars per person per day consumption expenditure, the incidence of poverty in China was 88.3% in 1981, and the number of people under poverty line was as high as 884 million, accounting for 46.45% of the world's population under poverty,²⁵ which is much higher than the proportion of China's population in the world's population. This was the biggest basic national condition of China at the beginning of reform and opening up, and the biggest initial condition and constraint of China's socialist modernization.

For this reason, the first thing was to break through the “poverty trap” and start the era of “getting rich first.” This determined China's basic national policies: first, to implement family planning and control the rapid growth of the total population,²⁶ without which the rate of capital accumulation could not be increased; second, to implement the rural reform of the household joint production contract responsibility system to drastically reduce the absolute poverty in rural areas; third, to invest in people's education and health care to raise the level of human capital of all people; fourth, to create jobs for more than a quarter of the world's urban and rural labor force; fifth, to open up to the outside world, integrate into the world economy, develop labor-intensive industries, give full play to the advantages of labor resources, expand exports, and improve international competitiveness.

The greatest achievement of the new reform and opening-up period is the reduction of the vast majority of the rural poor. As a country with a large population under poverty, the development experience of the international community does not provide us with ready-made answers or paths on how China can break the “poverty trap,” which is a global development problem. It is based on a profound summary of both positive and negative historical experiences since the founding of New China that Deng Xiaoping clearly pointed out that poverty is not socialism, and that socialism should eliminate poverty. Based on China's basic condition of being in the low-income stage, he creatively proposed the development strategy of “getting rich first,” that is, to let some people get rich first, and the rich first will lead the rich later, and eventually achieve common prosperity. Through the strategy of unbalanced development, the “cake” was made bigger faster in order to break through the “poverty trap.” To this end, the Third Plenary Session of the Twelfth Central Committee of the Party held in 1984 clearly stated that “the policy of encouraging some people to get rich first is in line with the law of socialist development and is the inevitable pathway for the whole society to get rich.”²⁷

At the beginning of reform and opening up, China's economic system reform first made great achievements in rural areas, which accounted for more than 80% of the country's total population. The full implementation of the household production contract responsibility system stimulated 800 million peasants’ great enthusiasm for production, breaking through the “poverty trap” first among all low-income countries and providing the most effective development path and Chinese experience for developing countries.

First, agriculture continued to grow, from 1978 to 1990, the value added of agriculture increased by 90.7%, with an average annual growth rate of 5.5%, which was both a historical record for China and significantly outpaced the growth rate of the world value added of agriculture (2015 USD prices) during the same period (3.5%). China's share of the world value added of agriculture increased from 17.0% in 1978 to 20.3%,²⁸ while China's share of the world's agricultural land area only increased from 10.6% in 1978 to 12.4% in 1990,²⁹ and China's share of inland water resources decreased from 7.4% to 6.6% of the world.³⁰

Second, national per capita grain production increased from 317 to 390 kg, and rural per capita disposable income increased from 133.6 yuan to 686.3 yuan, an increase of 2.7 times in real terms at constant prices, with an average annual growth rate of 8.6%, a record in Chinese history and a world record.

Third, the number of rural poor and the incidence of poverty nationwide have dropped significantly. According to China's rural poverty standard in 1978, the national rural poverty population dropped from 250 million in 1978 to 85 million in 1990, and the incidence of poverty dropped from 30.7% to 9.4%.³¹ According to the World Bank's low international poverty line standard of less than 1.90 international dollars consumption expenditure per person per day, by 1990, the incidence of poverty in China dropped to 66.6%, the international poverty line population decreased from 884 million in 1981 to 761 million, and its proportion in the world dropped from 46.45% in 1981 to 41.16%.³² It should be noted that from 1978 to 1990, it took China only 12 years to basically solve the problem of feeding 840 million rural people (with rural population accounting for as much as 27.8% of the world's population), feeding a total population of 1.14 billion, or 21.5% of the world's total population.³³

This is the second liberation of Chinese farmers after the land reform. In 1990, Deng Xiaoping made it clear that “socialism is not about a few people getting rich and the majority getting poor, it is not about that. The greatest superiority of socialism is common prosperity, which is a reflection of the essence of socialism.”³⁴

In early 1992, Deng Xiaoping further pointed out in his Southern Talk that “the essence of socialism is to liberate the productive forces, develop them, eliminate exploitation, eliminate polarization, and ultimately achieve common prosperity.” This is the biggest difference between socialist modernization and capitalist modernization. Deng Xiaoping specifically stated, “To take the road of socialism is to gradually achieve common prosperity.”³⁵ To this end, China must achieve common prosperity in stages and steps, and also by “classification guidance” by region, by urban and rural areas, and by population groups.

Thus, Deng Xiaoping creatively proposed a roadmap for achieving common prosperity, that is, “in two steps”: the first step is to “get rich first,” “let some people get rich first”; the second step is “common prosperity,” “let the ones who got rich first help those who got rich later, and eventually reaching common prosperity.”

China's modernization development in the primary stage of socialism has formed interlocking development stages with different priorities; the period 1978–2001 was the stage of “getting rich first” and the stage of achieving the basic level of prosperity, guided by the unbalanced development strategy. Without “getting rich first,” it would have been difficult for China, with a population of over 1 billion, to break through the “poverty trap” under low-income conditions. Only when the “poverty trap” is broken and the problem of food and clothing is solved can China gradually move toward the stage of “common prosperity.”

By 2000, China achieved ahead of schedule the strategic goal of quadrupling its GNP as proposed by Deng Xiaoping. At constant prices, in 2000, China's GDP was equivalent to 6.55 times that of 1980, and GDP per capita (international dollars in 2017) rose from 679 international dollars in 1980 to 3452 international dollars in 2000, equivalent to 5.08 times that of 1980.³⁶ From an international perspective, China has moved from the low-income stage to the lower-middle-income stage, and people's lives in general have achieved a historic leap from poverty to subsistence to well-off levels, with national per capita consumption expenditure equivalent to 3.49 times that of 1980, and the Engel coefficient of rural households falling from 67.7% (absolute poverty type) in 1978 to 49.1% (subsistence type) in 2000. The Engel coefficient of urban households dropped from 57.5% (subsistence type) to 39.2% (well-off type).³⁷ The number of years of education per capita increased from less than 5 years in 1981 to 7.9 years in 2000; life expectancy per capita increased from 65.9 years in 1978 to 71.4 years in 2000; the Human Development Index (HDI) reached 0.591, achieving a leap from a low to a medium level of human development. Especially worth mentioning is that China has created the world's largest number of new jobs. From 1978 to 2000, the total number of employed people nationwide rose from 401.52 million to 720.85 million, an increase of 319.33 million, an average of 14.52 million new jobs per year, equivalent to 1/3 of the world's new jobs.

In 2000, China began to enter the stage of building a moderately prosperous society in all aspects. After the people's life in China had generally achieved the historic leap from subsistence to well-off, in November 2002, the 16th Party Congress clearly put forward the goal of building a higher level of well-off society benefiting more than one billion people by 2020. It was proposed that “with the goal of common prosperity, the proportion of middle-income earners should be expanded and the income level of low-income earners should be raised.” This marks that after China has basically reached the second step of modernization at the well-off level, it has started to move gradually from the “first rich” to the new stage of “common prosperity.”

By 2006, China had stepped into the ranks of middle-income countries. China's GDP per capita exceeded US$2000 (current price), which is close to 6000 international dollars by 2017 international dollars, close to the average level of the world's low- and middle-income countries (6500 international dollars), but significantly lower than the average level of the world's middle- and high-income countries (9900 international dollars),³⁸ and the Engel coefficient of urban and rural residents has decreased to 35.8% and 43.0%, respectively.

In October 2007, the 17th Party Congress put forward the “people-oriented” scientific development concept, insisted on comprehensive, coordinated and sustainable development, and clearly proposed that by 2020, a reasonable and orderly pattern of income distribution would be basically formed, middle-income earners would be in the majority, absolute poverty would be basically eliminated, and people's affluence would be generally increased; efforts would be made to raise the income of low-income earners, gradually raise the standard of poverty alleviation and the minimum wage, and gradually reverse the trend of widening income distribution. The systematic goal of building a moderately prosperous society in 2020 was redesigned, proposing the new goal of quadrupling the per capita GDP by 2020 compared with that of 2000 is put forward; building a moderately prosperous society in all aspects must be a society of common prosperity, and the proportion of middle-income earners must be in the majority, exceeding 50% (equivalent to 700 million people and 250 million households), and efforts are made to transform more and more low-income earners into middle-income earners.

By 2010, China's GNP and per capita income of urban and rural residents had doubled compared to 2000, with per capita GDP reaching 8885 international yuan, entering the middle and high-income stage; the human development index reached 0.702, moving from the middle human development level to the high human development level; per capita life expectancy reached 74.8 years, already higher than the per capita life expectancy of middle and high-income countries (73.5 years). The urbanization rate of our resident population has approached 50% (at 49.95%). The rural poverty population has been reduced from 462.24 million in 2000 to 165.67 million by 2010 rural poverty standards, creating a higher level of favorable conditions for the full realization of a well-off society benefiting 1.4 billion people in 2020.

3.3 New Era of Socialism with Chinese Characteristics

The Resolution of the Sixth Plenary Session of the 19th CPC Central Committee pointed out that since the 18th CPC National Congress, socialism with Chinese characteristics has entered a new era. The main task facing the Party is to achieve the first century of struggle, embark on a new journey to achieve the second century of struggle, and continue to advance toward the grand goal of achieving the great rejuvenation of the Chinese nation.³⁹

Since the 18th Party Congress, socialism with Chinese characteristics has entered a new era, and the Party's theoretical innovation and practical innovation in governance have become important features, among which the promotion of common prosperity has become a major development task at this stage.⁴⁰ In this sense, the new era of socialism with Chinese characteristics is “the era of gradually realizing common prosperity for all people.”

On November 17, 2012, General Secretary Xi Jinping made it clear in his speech at the first collective study of the Political Bureau of the 18th Central Committee that common prosperity is the fundamental principle of socialism with Chinese characteristics, so it is necessary to make the fruits of development benefit all people more and more fairly and make steady progress toward common prosperity.⁴¹

In October 2015, General Secretary Xi Jinping clearly put forward the new development concept, including the concept of sharing, at the Fifth Plenary Session of the 18th Party Central Committee. He stressed that sharing is the essential requirement of socialism with Chinese characteristics. It is necessary to insist that development is for the people, development relies on the people, and the fruits of development are shared by the people, and make more effective institutional arrangements so that all people can have more sense of gain in the common and shared development, enhance the momentum of development, improve the unity of the people, and make steady progress toward common prosperity.⁴² He further pointed out in his speech at the forum for people outside the Party held by the Central Committee that “the sharing of the fruits of reform and development by the general public is the essential requirement of socialism and an important manifestation of our Party's adherence to the fundamental purpose of serving the people wholeheartedly. The development we pursue is the development for the benefit of the people, the affluence we pursue is the common wealth of the people. The ultimate criterion for judging the success of reform and development is whether the people enjoy the fruits of reform and development together.”⁴³

In May 2016, General Secretary Xi Jinping clearly pointed out when chairing the 13th meeting of the Central Leading Group of Finance and Economics that expanding the middle-income group is related to the realization of the goal of building a moderately prosperous society in all aspects, an inevitable requirement for transforming and adjusting the structure, and an inevitable requirement for maintaining social harmony and stability and the long-term stability of the country.⁴⁴

By 2020, China had become the world's largest middle- and high-income country with a high level of human development. In 2020, China's GDP per capita reached 72,000 yuan, equivalent to 76.84 times that of 1952 in constant prices and 4.73 times that of 2000 in 2017 international dollars; China's GDP per capita reached 16,411 international dollars, already close to that of the world's middle and high-income countries, the human development index reached 0.765, among the world's high human development levels; the number of years of education per capita reached 10.8; the life expectancy per capita reached 77.5 years, which is higher than the average of middle and high-income countries (75.9 years) and significantly higher than the world average (72.7 years).⁴⁵

By 2020, China had become a country with the largest middle-income group in the world. The National Bureau of Statistics (NBS) has determined that the standard for the middle-income group in China is an average annual income of 100,000–500,000 yuan per family of three, which is equivalent to 33,000–165,000 yuan per capita. To facilitate international and historical comparisons, the middle-income group is defined as having an income of 10–100 international dollars per person per day according to the World Bank at purchasing power parity (PPP). Based on the PPP conversion factor of 4.225,⁴⁶ in 2020, the per capita daily income of China's residents reached 20.9 international dollars, of which the per capita disposable income per person per day in urban and rural areas reached 28.4 international dollars and 11.1 international dollars, respectively, passing the international middle-income threshold and is an international marker for the full realization of a well-off society. If we divide the national per capita disposable income by quintiles, the per capita disposable income of 20% of high-income households is 52.1 international dollars per day, 20% of upper-middle-income households is 26.7 international dollars, 20% of middle-income households is 17.0 international dollars, 20% of lower-middle-income households is 10.7 international dollars, and the four groups account for 80% of the total population, totaling 1.129 billion people; 20% of low-income households were 5.1 international dollars, totaling 282 million people. The per capita disposable income structure of the population developed from “60–40” makeup in 2015 to a new “80–20” makeup in 2020 (see Table 3.2). It is expected that by 2030, 20% of low-income households will double their per capita disposable income (including transfer payments) to reach more than 10 international dollars per person per day, transforming from the current “80–20” to a new pattern of middle income for the entire population. But by quintiles, there is still a large gap in the disposable income per capita of our residents.

Table 3.2 Disposable income per capita by quintile grouping (2015, 2020)

At present, the actual consumption level and consumption welfare of urban and rural residents in China have reached the middle-income level. By 2020, the Engel coefficient of urban and rural households will drop to 27.6% and 30.0% respectively, which is an affluent consumption structure. Most historically and globally significant, China has completely lifted hundreds of millions of people out of absolute poverty for the first time in thousands of years,⁴⁷ achieving the primary goal of the United Nations’ 2030 Sustainable Development Goals (SDG) on poverty eradication 10 years ahead of schedule. In addition, basic medical insurance covers more than 1.3 billion people and pension insurance covers nearly 1 billion people, building the world's largest, most socialist, and well-off society that benefits 1.4 billion people. This proves that the socialist system is capable of completely eliminating absolute poverty in a relatively short period of time, and will also achieve the historic leap from making a few people rich first to making the majority rich, and eventually making all people rich. This lays a more solid foundation for the development of China's future (2021–2035) to achieve common prosperity.

Under the leadership of the Party Central Committee with Comrade Xi Jinping at the core, China completed the task of eradicating poverty by 2020, historically solving the problem of absolute poverty and achieving the ambitious goal of building a moderately prosperous society in all aspects, which is itself the development path of practicing common prosperity.

First, the number of poor people in various categories of national poverty line standards has been reduced. At the beginning of reform and opening up, according to the 1978 rural poverty line standard, the rural poor population in China was 250 million people with a poverty incidence rate of 30.7%, which was reduced to 32.09 million people by 2000, and the poverty incidence rate dropped to 3.5%. According to the 2010 poverty line standard, the rural poverty population was still as high as 462.24 million in 2000, which was reduced to 165.67 million by 2010, and after the battle against poverty, all of them will be out of poverty by 2020 (see Table 3.3). According to data published by the Chinese government, the per capita net income of the rural poor who have established a record card, increased from 2982 yuan in 2015 to 10,740 yuan in 2020, a nominal increase of 3.60 times. Based on the private consumption purchasing power factors of 4.027 and 4.225, respectively, as provided by the World Bank database, this growth corresponds to an increase in income from 2.0 to 7.0 international dollars per person per day, which is already above the high international poverty line (5.50 international dollars per person per day expenditure). The average rural low-income standard, which increased from 2068 per person per year in 2012 to 5842 in 2020,⁴⁸ increased 2.82 times in nominal terms. With private consumption purchasing power factors of 3.665 and 4.176, respectively, as provided by the World Bank database, this corresponds to an increase in the per person per day LPS from I$1.55 to I$3.84, which is already above the international mid-poverty line standard (I$3.20 per person per day expenditure). This marks that by 2020, “all rural poor under China's current standards have been lifted out of poverty, all poor counties have been removed, and nearly 100 million rural poor have been lifted out of poverty, making a significant contribution to the cause of global poverty reduction. China will continue to consolidate and expand the results of poverty eradication, solidly promote common prosperity, and continuously improve the level of people's well-being.”⁴⁹

Table 3.3 Rural poverty in China (1978–2019)

Second, China has reduced the number of poor people in all categories of international poverty line standards, which has greatly contributed to the significant reduction of absolute poverty globally and has world significance. According to the data published by the World Bank, based on the low standard of the international poverty line (daily consumption expenditure per person is less than 1.90 international dollars), the incidence of poverty in China was as high as 88.3% in 1981. That figure fell to 40.5% in 1999, a reduction of 47.8 percentage points, and the absolute poverty population was reduced from 883.84 million to 509.94 million, a reduction of 373.9 million from 1981. By 2016, the number of people under poverty in China decreased to 6.91 million, and the incidence of poverty fell to 0.5%. The share of China's poor population in the world's poor population also decreased from 46.45% in 1981 to 0.1% in 2016. The world's poor population decreased from 1.903 billion in 1981 to 720 million in 2016, a total reduction of 1.183 billion people, of which China has reduced 877 million people cumulatively, with a contribution rate of 74.1% (see Table 3.4).

Table 3.4 Comparison of China and world poverty population status (1981–2016)

According to data published by the World Bank, based on the international poverty line mid-standard (consumption expenditure of less than 3.20 international dollars per person per day), the incidence of poverty in China was as high as 90.0% in 1990 and fell to 5.4% in 2016, a reduction of 84.6 percentage points, or an average of 3.3 percentage points per year, and the number of people under poverty decreased from 102.9 million to 74.67 million, a reduction of 932.77 million from 1990. The number of poor people decreased from 102,900,000 to 74,670,000, or 932,277,000 less than in 1990, an average annual decrease of 35,880,000. The share of China’s poor population in the world’s poor population also fell from 35.3% in 1990 to 4.0% in 2016, a cumulative decline of 31.3 percentage points, or an average annual decline of 1.2 percentage points. The total number of poor people in the world decreased from 2.919 billion in 1990 to 1.886 billion in 2016 during the same period, a total reduction of 1.033 billion people, of which China reduced a total of 933 million people, with a contribution rate of 90.3% (see Table 3.5). After the 18th Party Congress, eliminating absolute poverty has become a key task for the development of people’s livelihood. The per capita disposable income of rural residents in poor areas nationwide has increased from 6079 yuan in 2013 to 12,588 yuan in 2020, with an average annual growth rate of 11.6%, mainly because the proportion of wage income and business income of poor people has increased year by year.⁵⁰ This shows that rural residents in poor areas do not rely on “blood transfusion,” but mainly on their own hard work to get out of poverty. In terms of international comparisons, the PPP factor⁵¹ is equivalent to an increase from 4.3 to 8.1 international dollars per person per day, which exceeds the high international poverty line (less than 5.5 international dollars per person per day in consumption expenditure).

Table 3.5 Comparison of absolute poverty population status between China and the world (1990–2016)

By 2020, China has basically eliminated the population in the three international poverty line standards. This demonstrates to the world that only socialism with Chinese characteristics can completely eliminate absolute poverty in 30 years (1990–2020), making a significant contribution to the elimination of absolute poverty for humanity and going down in the history of world development.

In addition to reducing the population of all types of income poverty, China's rural areas have also reduced other types of poverty. First, it has reduced the population of unsafe drinking water. According to data released by the Ministry of Water Resources, since the implementation of the 13th Five-Year Plan, the central government has invested a total of 26.5 billion yuan in rural drinking water, and from 2016 to 2019, the average annual consolidation and improvement of drinking water safety population is about 57 million people. By the end of June 2020, the problem of drinking water safety for poor people nationwide will be fully resolved. Second, the number of people under education poverty has been reduced. The compulsory education guarantee system has been implemented to eliminate educational poverty. Since 2006, the policy of exempting school fees and miscellaneous expenses, providing free textbooks and subsidizing living expenses for boarding students from economically disadvantaged families (“two exemptions and one subsidy”) has been implemented for rural students. By August 2020, the “two exemptions and one subsidy” had covered rural areas nationwide, and the phenomenon of dropping out of compulsory education in poor areas was basically eliminated. Third, the number of poor people in health has been reduced. The basic medical insurance system for the poor has been established and improved, and the problem of people returning to poverty due to illness has been effectively solved. 2019 will see the full abolition of the ceiling line for reimbursement of major diseases for the poor. In 2016–2019, the proportion of out-of-pocket medical expenses for the poor has dropped from 43% to about 10%. Fourth, the number of people living in poverty has been reduced. Since 2017, the average household subsidy standard for the renovation of rural dangerous houses in deep poverty areas has been increased to 16,000 yuan. Since the 18th Party Congress, a total of 7.9 million households and 25.68 million poor people have left their dangerous residences such as mud and straw houses and adobe houses and lived in safe housing. Meanwhile, a total of 10.75 million households such as rural low-income households, scattered-support special hardship cases, and families with disabled persons in difficulty have been supported to renovate their dangerous houses.⁵²

On July 1, 2021, on the occasion of the 100th anniversary of the founding of the Communist Party of China, General Secretary Xi Jinping officially announced to the whole country and the whole world that after the continuous struggle of the whole Party and the people of all ethnic groups, we have achieved the first 100-year goal, built a moderately prosperous society on the Chinese land, solved the problem of absolute poverty in a historic manner, and are moving forward with vigor toward the second goal of building a socialist modern power in a comprehensive manner. We are marching forward with vigor toward the second 100-year goal of building a strong socialist modern country.⁵³

It can be seen that Chinese socialist modernization has gone through different stages of development, showing regular characteristics, i.e. a long-term historical evolution process from quantitative change to partial qualitative change (stage by stage) and then from quantitative change to total qualitative change, while surpassing capitalist modernization, not only making some people rich first, but also making the whole people gradually achieve common prosperity, creating a new path of human modernization.

In short, since the founding of New China, especially after the reform and opening up, China has “completed in just a few decades the industrialization process that developed countries have gone through for hundreds of years, creating two miracles of rapid economic development and long-term social stability,”⁵⁴ as well as the world miracle of reducing and eliminating all kinds of poverty. From now on, the overall task of the CPC is to achieve socialist modernization and the great rejuvenation of the Chinese nation, and to build a strong, democratic, civilized, harmonious, and beautiful modernized socialist country in the middle of the century on the basis of building a moderately prosperous society in two steps, so as to promote the great rejuvenation of the Chinese nation through Chinese-style modernization. This indicates that in the future, China will create two new miracles: a strong socialist modern state and common prosperity for all people, and will continue to surpass the modernization of the developed countries in the West, opening up a new and righteous path for the developing countries.