Prospects for Building a Common Prosperity Society in the New Era

Abstract

General Secretary Xi Jinping pointed out that we have now reached the historic stage of firmly promoting common prosperity. The common prosperity is for everyone, the prosperity of people’s material and spiritual lives, not the prosperity for a few people, and not egalitarianism. We should study the goals of different stages and promote common prosperity step by step. The Central Economic Work Conference in 2021 proposed that “we should correctly understand and grasp the strategic goals and practical ways of achieving common prosperity.”

General Secretary Xi Jinping pointed out that we have now reached the historic stage of firmly promoting common prosperity. The common prosperity is for everyone, the prosperity of people’s material and spiritual lives, not the prosperity for a few people, and not egalitarianism. We should study the goals of different stages and promote common prosperity step by step.¹ The Central Economic Work Conference in 2021 proposed that “we should correctly understand and grasp the strategic goals and practical ways of achieving common prosperity.”²

This chapter deals with the strategic goals for achieving common prosperity, including the overall goals and milestones, the quantitative calculation and analysis of the five major goals, and the quantitative indicators for promoting common prosperity.

5.1 Overall Goals and Milestones

Accelerated development is a critical foundation and imperative for achieving common prosperity. Without development, common prosperity cannot be achieved, and without accelerated growth, it cannot be achieved promptly. Achieving social justice is influenced by many factors, the most critical of which is the level of economic and social development. To steadily advance common prosperity, we must consistently prioritize economic development as the core, and continuously unleash and cultivate productive forces to lay a solid material foundation for all people to achieve common prosperity.

Based on the assessment of the situation, the Party Central Committee proposed the strategic goal of “three steps” for common prosperity. The basis for the overall goal of achieving common prosperity for everyone is the Outline adopted at the Fourth Session of the 13th National Congress of CPC. The first strategic goal of common prosperity proposed in the Outline is: By the end of the 14th Five-Year Plan period, common prosperity for everyone will take a solid step forward, and the gap between residents’ income and their actual consumption level will be gradually narrowed. The second strategic goal of common prosperity is that by 2035, the per capita GDP will reach that of the middle-developed countries, the middle-income group will expand significantly, basic public services will be equalized, the gap between urban and rural regional development, and the gap between residents’ living standards will be significantly reduced, and the common prosperity for everyone will make more obvious and substantial progress. This indicates that 2035 is only an important milestone for China to achieve common prosperity and that achieving common prosperity is a longer-term goal to strive for. The third strategic goal of common prosperity is that by the middle of this century, common prosperity for everyone will be realized, and the gap between residents’ income and actual consumption level will be narrowed to a reasonable range.³ This is to realize the two great goals of “people’s prosperity and the country’s strength,” one of which is to realize the common prosperity for everyone, and the other is to build a strong socialist modern country.

Based on this, the goal of achieving common prosperity for everyone is consistent with the strategic plan of the 19th National Congress of the CPC to achieve strong socialist modernization in the next 30 years in two stages. In the first stage, by 2035, the common prosperity for everyone will be more obvious and substantial, and socialist modernization will be realized; in the second stage, by the middle of this century, the common prosperity for everyone will be realized, and a rich, strong, democratic, civilized, harmonious and beautiful socialist modernized power will be built. This is both a necessary stage of socialist modernization with Chinese characteristics and common prosperity, a stage of mutual convergence, and a stage of gradual quantitative change to great qualitative change.

Achieving common prosperity in China is a continuous and progressive development process with different stages, and it is particularly important to set targets for different stages. To achieve substantial progress and ultimately attain common prosperity for everyone by the mid-century, six Five-Year Plans need to be formulated and executed between now and 2035, from the 14th Five-Year Plan period. Our focus will be on establishing key milestones and defining crucial tasks in the 14th Five-Year Plan and the years leading up to 2035, in order to achieve common prosperity through increased development, economic growth, and strengthened national power.

The 14th Five-Year Plan is the opening-up plan for China to promote common prosperity. The overarching objective of this plan is to advance common prosperity. To achieve this goal, the following major tasks will be undertaken: consolidating poverty alleviation achievements, comprehensively implementing the rural revitalization strategy; driving the development of a new form of urbanization, enhancing urban services for the mobile population, and promoting inclusive and sustainable urban growth of higher quality; improving the income distribution system and aligning the three distribution systems; prioritizing employment policies and promoting better and higher-quality employment opportunities; using reform as the catalyst to build a high-quality education system, advance the construction of a healthy China, and improve the multi-tiered social security system. The key is to achieve the major economic and social development goals of the 14th Five-Year Plan on schedule and fully accomplish major strategic tasks, so that China’s economic strength, scientific and technological power, comprehensive national strength, and people’s living standards can leap to a new and higher level.

5.2 Development Goals and Indicator System

The Outline adopted at the Fourth Session of the 13th National Congress of CPC embodies Xi Jinping’s Thought of Socialism with Chinese Characteristics for a New Era, with a particular emphasis on the overarching goal of advancing common prosperity for everyone. The Outline serves as the foundation for measuring progress toward this goal, establishing specific quantitative indicators, and building a comprehensive indicator system to evaluate the main economic and social development targets for the 14th Five-Year Plan period and beyond 2035. This is in accordance with the requirements for common prosperity and based on the proposals for formulating the 14th Five-Year Plan for National Economic and Social Development and the 2035 Long-Range Objectives.

The establishment of the common prosperity indicator system should adhere to five basic principles. First, it fully reflects the requirements of the connotation of common prosperity in socialism with Chinese characteristics put forward by the Party Central Committee and divides the quantitative indicators into five categories, including productivity indicators, development opportunity indicators, development guarantee indicators, income disparity indicators, and people’s well-being indicators. The indicators are to promote sustainable development, strengthen and optimize public services, compensate for market failures, and fulfill government functions, to be comprehensive, scientific, and quantitative. Second, the evaluation indicators are selected according to the availability of data, to facilitate statistics, observation, evaluation, comparison, and implementation. Third, we make full use of the important indicators that embody the promotion of common prosperity in the 14th National Five-Year Plan, especially the indicators of people’s well-being (7 priority indicators and 5 sub-priority indicators). Fourth, we emphasize the representativeness of indicators and set the most representative indicators in important areas. Fifth, we adopt internationally accepted comparable indicators, such as GDP per capita (2017 PPP), total labor productivity (2017 PPP), life expectancy per capita, average years of education of the working-age population, human development index (HDI), and Gini coefficient to facilitate historical longitudinal comparisons and international cross-sectional comparisons.

The common prosperity indicator system with Chinese characteristics has been designed based on a retrospective quantitative analysis of past data to assess its feasibility. This system takes a forward-looking approach and provides trend forecasts for the period between 2020 and 2035 (covering three five-year plans), reflecting the development trend of common prosperity and guiding decision-making. The results may differ from expectations and can be adjusted accordingly, especially for the expected indicators. The system also compares China's performance with internationally accepted indicators, such as the human development index, with the aim of making China the first populous country in the world to achieve common prosperity. The indicator system provides a feasible, continuous, and adjustable framework for the annual monitoring of common prosperity, mid-term evaluation of the five-year plan, and subsequent evaluations. The following section outlines the five major categories and individual indicators that make up the common prosperity indicator system.

5.2.1 Productivity Indicators

First, the growth of gross domestic product (GDP). This is the core indicator that measures the level of economic development in our country and reflects the comprehensive economic strength and international competitiveness of our country, providing the material basis for achieving common prosperity for all people. In the future, our country still has huge potential for development, a growth momentum, and is in a stage where the goal of reaching the per capita Gross Domestic Product of a medium-developed country by 2035 according to the proposals of the Party Central Committee. By 2035, GDP in our country can still maintain a high-speed growth, with an actual growth rate of around 5%. Maintaining this high-speed potential growth rate is in line with the speed, structural optimization, and energy transformation of our country entering the high-income development stage and is also conducive to realizing high-quality economic development. Additionally, this growth rate is significantly higher than the average growth rate of 2% for other high-income countries and still has a significant catch-up effect, which can be seen as a growth bottom-line indicator. Based on constant prices in 2020, by 2035, our country's GDP is expected to increase from 10.16 trillion yuan in 2020 to more than 21 trillion yuan, equivalent to rising from 23.01 trillion international dollars to more than 48 trillion international dollars. The proportion of our country's GDP (2017 international dollars) in the world's GDP will continue to rise significantly, from 17.4% to around 27%, with our economic strength making continuous progress and providing a solid material basis for promoting common prosperity for all people. At the same time, per capita GDP in our country is expected to double, from 72,000 yuan in 2020 to 146,000 yuan in 2035, equivalent to rising from 16,800 international dollars to more than 33,500 international dollars. This means that our country will transition from a high-income level (before 2025) to a medium-developed country level (by 2035), and become an important marker for achieving the goal of common prosperity for all people.

Second, the growth of total labor productivity. Labor income is the main source of income for urban and rural residents in China, and the growth of labor income mainly comes from the continuous growth of labor productivity. The increase in per capita physical capital stock and human capital level will improve labor productivity. According to the requirement of the 14th Five-Year Plan that the growth of labor productivity of all employees is higher than the growth of GDP, by 2035, the average annual growth rate of labor productivity of all employees in China will be more than 5%, more than double that of 2020, and the relative labor productivity level of the United States will rise from 25% to more than 40% (see Table 5.1). In terms of demographic trends, the total number of employed people in China has reached its peak (2017) and is slowly declining, the agricultural labor force continues to decline, and economic growth mainly depends on the improvement of labor quality, technological progress, and institutional innovation. The sustained increase in total labor productivity will help promote the “two rises”: First, to increase the proportion of labor compensation in national income⁴; Second, to continue to increase the proportion of wage income in per capita disposable income (55.7% in 2020), which will greatly contribute to the common prosperity for everyone.

Table 5.1 Trends in GDP per capita and labor productivity growth in China (1990–2035)

Third, the average years of education of the working-age population. Xi pointed out that “high-quality development requires high-quality workers, and only by promoting common prosperity, raising the incomes of urban and rural residents, and improving human capital can we improve total factor productivity and consolidate the power base of high-quality development.”⁵ This indicator refers to the average number of years of academic education (including adult academic education, excluding non-academic education) received by a country’s working-age population, which fully reflects the level of human capital and the quality of the labor force. The average number of years of education among China's working-age population is projected to increase from 9.7 in 2010 to 12.3 in 2035, with a projected average annual growth rate of 0.9%. This represents an increase from 10.8 years in 2020 and is expected to reach 11.3 years in 2025. The growth rate in years of education is higher than the average of countries with very high human development levels, which was 12.0 years in 2018 (see Appendix).⁶ Total national human capital (the product of the working-age population and the population’s average years of schooling) will increase from 10.8 billion person-years in 2020 to 12 billion person-years in 2035. The human resources in China are expected to be the world's largest, despite the country's population ranking second globally after India. With an average annual growth rate of 0.7% in human capital, China is poised to continue its position as a leading global provider of human resources. While the quantitative population dividend is declining, the human capital dividend continues to rise and is becoming one of the country’s most important sources of sustainable economic growth. Notably, China will remain the world’s largest labor force, 1.63 times the size of India’s in 2020.⁷ The main reason is that China’s female labor force participation rate will be as high as 68.6% in 2019, significantly higher than India’s (22.3%) and the United States’ (67.9%).⁸

Fourth, talent resources. Talent refers to people who have certain professional knowledge or specialized skills, perform creative work, and contribute to society, are workers with high ability and quality in human resources, and are the first resource for economic and social development.⁹ China’s total talent resources grew from 120 million people in 2010 to 220 million people in 2020, a net increase of 100 million people, accounting for the proportion of total employment from 15.8% to 29.3%. The presence of professional and technical personnel in China's workforce continues to grow, accounting for over half of the total number. The number of full-time equivalent personnel in research and development has more than doubled and is expected to break the 10 million mark annually. As a result, China's advantage in terms of scale, quality, and competitiveness of its talent pool will become increasingly prominent. These developments will help the country realize its strategic goal of becoming a world leader in innovation and a “strong talent country” as outlined by the Fifth Plenary Session of the 19th CPC Central Committee.

In conclusion, China is still in the fast-paced development stage, which presents favorable conditions for common prosperity. First and foremost, the prosperity of all people must be achieved, with a shift from a middle to high-income level, and ultimately reaching a level of medium development. This requires wealth through labor, meaning a continuous increase in the productivity of all workers, “enhancing the human capital and professional skills of society as a whole,” and “providing more people with opportunities to become wealthy.”¹⁰

5.2.2 Development Opportunities Indicators

First, the urbanization rate of the resident population. In 2020, China’s urban population will reach 902 million, accounting for 20.7% of the world’s total urban population and 3.2 times the urban population of the United States.¹¹ The urbanization rate of the resident population has reached 63.89%,¹² which is higher than the world urbanization rate (56.15%), but still significantly lower than the urbanization rate of OECD countries (81.5%).¹³ The potential for further urbanization among the resident population remains vast.¹⁴ It is projected that the rate of urbanization among the resident population in China will steadily rise to nearly 70% by 2025, with the urban population expected to surpass 1 billion. By 2035, this rate is anticipated to reach 78–80%, approaching that of countries in the Organization for Economic Cooperation and Development (OECD). This will result in a total urban population in China of over 1.13 billion, surpassing the urban population of OECD countries, which stood at 1.11 billion in 2020, with an average annual growth of 13 million people. China’s future urbanization development should significantly increase the urbanization rate of household population from 45.4% in 2020 to over 70% in 2035, and increase the urban household population from 641 million in 2020 to over 1 billion, realizing the joint drive of the urban resident population and household population. This requires accelerating the citizenship of the new urban population and the equalization of basic public services (which can be called the “New Two” of urbanization), which not only fully reflects the people-centered development philosophy but also is a population growth driver to expand urban and even national domestic demand. At the same time, the total rural population will be reduced from 510 million to about 300 million,¹⁵ i.e., another 200 million rural people will be transferred to cities and towns in 15 years,¹⁶ accelerating the process of increasing the citizenship of the transferred rural population. This “one plus one minus” will significantly increase the total size of China’s middle-income population, significantly reduce the number of low-income people (per capita disposable income below 30,000 yuan, 2020 prices) and also help to further narrow the gap between urban and rural income consumption, from 1.97 times in 2020 to about 1.50 times, and basically realize the urban and rural population equalization of public services, and further accelerate the promotion of all people toward common prosperity. To avoid discrimination against the urban migrant population, it is proposed to stop using the term “non-resident population” and to refer to them collectively as “new citizens.” They are an important part of the urban population and a source of vitality for economic and social development to better reflect social equity.

Second, the number of new urban jobs. This indicator refers to the difference between the number of new jobs in urban areas and the number of attrition (due to retirement and casualties), which is not only a development indicator reflecting economic growth and job creation but also a basic indicator for achieving common prosperity. The employment priority policy is one of the three major macroeconomic policies in China and one of the core macroeconomic goals, fully reflecting that “employment is the foundation of people’s livelihood.” During the 13th Five-Year Plan period, the total number of new jobs in China’s urban areas reached 65.64 million, exceeding the expected target of 50 million, with an average of 13.13 million new jobs per year. In the near future, China’s cities and towns will still face the pressure of total employment and structural contradictions in employment, with more than 10 million new workers such as college graduates every year, and a large number of rural workers moving into employment. For example, China’s home economics industry employees reached 30 million people, of which about 90% are from rural areas. During the span of the 13th Five-Year Plan, the annual average growth rate of revenue generated by the domestic service industry has exceeded 20%. At present, there is a shortage of over 20 million workers in this sector, presenting a vast opportunity for growth and development.¹⁷ There are also various key groups of employees, and the need to continue to expand urban employment capacity and open up new employment channels. In the 14th Five-Year Plan period, the number of new jobs in urban areas is expected to be more than 11 million per year, and the cumulative number is more than 55 million. The number of urban jobs will increase from 463 million in 2020 to 613 million in 2025, with an average annual growth rate of 1.9%, and account for 61.6% of the total number of jobs in the country from 2020 to 2025. The share of total employment in the country will increase from 61.6% in 2020 to more than 66.7% in 2025 and about 75% in 2035, which also means that more than 150 million new jobs will be created, creating a continuous urban employment dividend. As the total urban population and new citizens continue to grow, the employment potential is huge, but so is the employment pressure. “Employment is the greatest livelihood,” and ensuring high-quality full employment is always the top priority for economic development and an important way to achieve common prosperity.

Third, urban survey unemployment rate. This indicator fully reflects the national urban employment situation, fully reflects the employment priority strategy and active employment policy, and promotes the realization of fuller and higher-quality employment. According to the structure of China’s working-age population and the development trend, setting the survey unemployment rate within 5.5%¹⁸ can be regarded as basically achieving full employment, which is within the socially acceptable range.

In conclusion, “Encouraging hard work and innovation for prosperity”¹⁹ is the foundation for fostering common prosperity. Labor is the origin of wealth generation and the fundamental means of achieving prosperity. Labor encompasses not only manual labor but also intellectual labor, producing not only economic, scientific, and social wealth but also intellectual, cultural, and environmental wealth. “Enhancing the capacity for employment and entrepreneurship and increasing the potential for prosperity” is key to realizing this goal.²⁰

5.2.3 Income Distribution Indicators

First, the per capita disposable income of the residents. Continuous improvement in the income level of the people is the core indicator of solid promotion of common prosperity. During the 14th Five-Year Plan period, the growth of disposable income per capita will be basically synchronized with the growth of GDP. By 2035, China’s disposable income per capita will double, with an average annual growth rate of about 5%. At the same time, the proportion of labor remuneration in the initial distribution will be continuously increased, and the mechanism of synchronous growth of wages and labor productivity will be improved.

Second, the ratio of urban and rural per capita disposable income. China has entered a stage where the gap between urban and rural residents’ per capita disposable income is gradually narrowing,²¹ from 2.56 times in 2020 striving to fall to within 2.0 times by 2035. This is one of the important signs to promote the common prosperity of China’s urban and rural residents. For rural residents, low-income households still do not reach 10 international dollars per person per day, corresponding to a population size of more than 36 million people. Raising the income level of this group is the key to narrowing the income gap between urban and rural residents.

Third, the Gini coefficient of disposable income per inhabitant. This indicator is used to measure the extent to which the distribution of income (consumer spending in some cases) of individuals or households deviates from a perfectly average distribution in an economy. According to data from the National Bureau of Statistics, China’s Gini coefficient is still as high as 0.465 in 2019, down only 0.026 relative to its high level (0.491) in 2008. By 2035, it should strive to drop to below 0.4. This is a very daunting task, which means that the role of redistribution in regulating income distribution has to be greatly enhanced.

In addition to these indicators, several monitoring indicators can be set, such as the Gini coefficient of per capita income of urban and rural residents, the share of labor compensation in the total income of the initial distribution (52.2% in 2019),²² the monitoring of per capita disposable income and consumption expenditure and structure (Engel coefficient) of the lowest 5% of the population (about 70 million people), etc.

In conclusion, the indicators of income distribution serve as a key representation of the distribution of wealth and its trend among urban and rural residents and different income groups in China. To achieve common prosperity, it is essential for national and local statistical departments to conduct comprehensive and standardized household income and expenditure surveys, and provide insightful analysis for informed decision-making. Timely and transparent announcements of the results to the public are also crucial.

5.2.4 Development and Security Indicators

First, increase the gross enrollment rate of preschool education, achieving inclusive preschool education nationwide.²³ This indicator refers to the ratio of the number of preschool students to the total number of preschool age groups set by the state, reflecting the people’s expectation of “education for the young.” According to the 14th Five-Year Plan, the gross enrollment rate of preschool education in China will increase from 85.2% in 2020 (surpassing the level of OECD countries, 79.8% in 2019²⁴) to over 90% in 2025. According to the China Education Modernization 2035, the gross enrollment rate of preschool education will exceed 95% in 2035 (see Appendix), which can strive to exceed 97% and better reflect the equity of early childhood education. From the perspective of international experience, preschool education has a very high private rate of return (lifelong benefits) and social rate of return, and is an area of human capital investment that cannot be ignored, becoming an important human capital condition for achieving common prosperity.

Second, the gross enrollment rate of high-school-level education. This indicator refers to the proportion of students enrolled in general high schools, adult high schools, and secondary vocational schools to the total population of the state-specified age group for high school level education. China has entered a highly universal stage of high school level education (gross enrollment rate above 90%), and the gross enrollment rate is expected to increase from 91.2% in 2020 to more than 92% in 2025 and to more than 97% in 2035 (see Appendix). On this basis, 12 years of compulsory education will be gradually implemented, and 12 years of compulsory education will be achieved nationwide by 2035.

Third, the gross enrollment rate of higher education. This indicator refers to the ratio of the number of students enrolled in higher education institutions to the total population of the state-defined age group for higher education, aiming to expand the scale of talent training in China and make them become the human capital support for industrial transformation and upgrading and high-quality economic development. In 2020, the gross enrollment rate of higher education in China has reached 54.4% and the total scale of schooling reached 41.83 million, exceeding the original target of 36.8 million, but still in the universalization enhancement stage (gross enrollment rate greater than 50%). The Outline sets the expected target of 60% gross enrollment rate in higher education by 2025 and will achieve the expected target of 65% gross enrollment rate in higher education by 2035 as proposed in China Education Modernization 2035. We expect that China’s higher education gross enrollment rate will reach about 65% by 2025 and should strive to reach over 70% by 2035, approaching the level of OECD countries (76.8% in 2020²⁵), after which it will enter a maturity period and become an important driver for expanding the size of middle income. It is expected that China’s population above college level will rise from 218 million in 2020 to more than 320 million in 2035, adding more than 100 million more people, which means at least 100 million more middle-income people. The role of talents as the first resource of China’s socialist modernization has become more prominent, as well as the ability to create social and family wealth.

Fourth, the basic pension insurance participation rate.²⁶ This indicator refers to the population participating in basic pension insurance, which reflects the income security of “old-age security.” In 2020, China’s basic pension insurance participation rate will exceed 91% and is expected to reach more than 95% in 2025, basically achieving full coverage of the statutory participants, covering more than 1 billion people, and achieving full coverage by 2035 (see Appendix), thus realizing income security for the entire elderly population.

Fifth, basic medical insurance coverage rate. Basic medical insurance is an important guarantee of “medical care for the sick.” In 2020, the number of people insured by basic medical insurance will reach 1361.31 million and the participation rate will remain stable at over 95% and is expected to reach over 98% by 2025, with full coverage by 2030.

Sixth, national and urban–rural maternal and child health indicators. This indicator mainly reflects the level of public health services and health levels in urban and rural areas are toward convergence, and taking the lead in reaching the level of OECD countries. This includes the infant mortality rate (‰), children under-five mortality rate (‰), and maternal mortality rate (1/100,000) indicators. In 2020, China’s infant mortality rate dropped to 5.4‰, already lower than the OECD countries’ 5.9‰ (data of 2019), children under-five mortality rate dropped to 7.5‰, already close to the OECD’s 7.0‰ (data of 2019), and maternal mortality rate fell to 16.9 per 100,000, also lower than the OECD countries’ 18 per 100,000 (data of 2017).

Seventh, the number of childcare places for infants and toddlers under the age of 3 per 1000 population. The significance of this indicator is to effectively solve the outstanding problem of shortage of care services for infants and toddlers under the age of 3 in China’s urban and rural areas, and to achieve the livelihood goal of “providing education for young children.” China only started to develop childcare services for infants and toddlers under 3 years old during the 13th Five-Year Plan period. In 2020, the number of childcare places for infants and toddlers under the age of 3 per 1000 population is only 1.8, and the total number of childcare places nationwide is only 2.54 million. For this reason, the 14th Five-Year Plan uses this indicator for the first time, and by 2025, the number of childcare places for infants and toddlers under the age of 3 per 1000 population will reach 4.5, and the total number of childcare places nationwide will reach about 6.4 million, equivalent to more than 2.5 times the number in 2020.

Eighth, the proportion of nursing-care beds in nursing homes. This indicator refers to the proportion of nursing-care beds to the total number of beds in elderly care institutions, which aims to meet people’s expectation of “care for the elderly.” The National Medium- and Long-term Plan for Actively Coping with Population Aging proposes to increase the number of nursing-care beds from 40% in 2019 to 50% in 2022 and 80% in 2035.

Ninth, the proportion of new subsidized housing in towns and cities to new residents. This indicator reflects the people-oriented concept of new urbanization, providing affordable housing for new urban residents and creating opportunities for them to share the dividends of urbanization.

Tenth, the coverage of volunteer service sites in the community integrated service facilities. The development of volunteerism is important for building a society of common prosperity and is conducive to improving the level of social governance at the grassroots level. This indicator is also the planning target proposed by the Ministry of Civil Affairs in the 14th Five-Year Plan for the development of civil affairs.

Eleventh, the coverage rate of township (street) wide elderly care service institutions with comprehensive functions. This indicator reflects the strengthening of the provision of community elderly services in response to the aging of the population, and the construction of a pattern of community participation in elderly care. This indicator is also a planning indicator proposed by the Ministry of Civil Affairs in the 14th Five-Year Plan for the development of civil affairs.

In conclusion, the development and security indicator is an important indicator that puts the people at the center and reflects the development ability of all the people and fully reflects the superiority of the socialist system: investing in the people, improving the people’s livelihood, improving the development ability of the people and enhancing their happiness.

5.2.5 People’s Welfare Indicators

First, the per capita disposable income of residents. Continuously raising the income level of all people and expanding the middle-income group²⁷ are the prerequisites for promoting the common prosperity of China’s urban and rural residents. As China’s total population has entered the peak plateau period, it is possible to achieve the growth of disposable income of residents in line with the growth of GDP. By 2035, the national per capita disposable income of residents will double from 32,200 yuan in 2020 to more than 64,400 yuan, and according to the annual income of a family of three from 96,600 yuan to 193,100 yuan, reaching the standard of middle-income families of the National Bureau of Statistics that the group with an average annual household income between 100,000 yuan (annual per capita income of 33,000 yuan) and 500,000 yuan (annual per capita income of 165,000 yuan).²⁸ Looking at the income levels of residents by quintiles (see Table 5.2), the population entering the middle-income range grows from about 576 million people in 2020 to about 1168 million people in 2035, and there are still 20% of low-income households with about 292 million people who have not yet reached the middle standard. For the purpose of international comparison, the international middle-income standard proposed by the World Bank should be used: 10–100 international dollars per person per day of income or expenditure. According to the calculation of the private consumption purchasing power parity conversion factor provided by the World Bank,²⁹ the daily income per person in China will rise from 21 international dollars in 2020 to 42 international dollars in 2035, all of which will reach the middle-income level and become a middle-income society with a very large population size in the world, and a major sign of common prosperity for everyone. Among them, 20% of high-income households will have a per capita daily income of over 100 international dollars, placing them at the world's high-income level. Meanwhile, 20% of upper-middle-income households will have a per capita income of more than 50 international dollars, and 20% of middle-income households will have a per capita income of over 30 international dollars. 20% of lower-middle-income households will have a per capita income of over 20 international dollars, while 20% of low-income households will surpass the middle-income threshold and become the focus of state and societal support. China will roughly form a 4 to 1 new pattern of redistribution or three distributions, namely, concentrating 80% of the population to help 20% of the key people, which better reflects the superiority of the socialist system. Consideration can be given to designing a national or regional basic income standard, based on which direct transfers from the central government to localities will be implemented, with the scale of transfers accounting for about 2% of GDP to subsidize or support 20% of the key population. Low-income people, with a total population size of less than 300 million, are mainly rural low-income people. We will increase their per capita daily income from 10.4 international dollars to about 20 international dollars, fully reflecting the advantages of the socialist society’s system of “supporting the weak.”

Table 5.2 National and per capita disposable income by quintiles (2020–2035)

Second, the Engel coefficient of urban and rural residents. Engel coefficient refers to the proportion of household food consumption expenditure to total consumption expenditure, which is inversely correlated with per capita income or consumption level and can reflect the actual living standard and quality of urban and rural residents. Since the reform and opening up, the Engel coefficient of urban and rural residents in China has shown a continuous and rapid decline and convergence (see Table 5.3), from absolute poverty (above 60%) to subsistence (above 50%), to moderate prosperity (above 40%), to affluence (above 30%), and will successively enter the stage of more affluence (less than 30%). The two indicators are expected to decline from 27.6% and 30.0% in 2019 to 25.5% and 27.9% in 2025, and further to 21.3% and 23.0% in 2035, respectively. This fully reflects the level of “higher quality of life” and also reflects the trend of significantly narrowing the gap between the real living standards of urban and rural residents.

Table 5.3 Engel coefficient of urban and rural households in China (1978–2035)

Third, life expectancy per capita. This indicator refers to the average number of years a newborn baby is expected to survive and is a comprehensive reflection of health care, people’s health, quality of life, and social development, and is one of the three synthetic indicators of the United Nations Human Development Index, as well as an objective indicator that fully reflects health equity. The most important indicator of modernization is still people’s health, which is the basis of people’s happy lives. General Secretary Xi Jinping pointed out that “people’s health is an important symbol of socialist modernization.”³⁰ By 2025, China’s per capita life expectancy will increase by one more year to 78.5 years. The “Health China 2030” Plan Outline proposes the goal of reaching 79 years of age by 2030. By 2035, it will reach 79.5 years (see Appendix),³¹ close to the level of OECD countries (80.9 years in 2019³²). By 2030, life expectancy per capita in China will be improved significantly, the level of the main health indicators of the population will enter the ranks of high-income countries, and health equity will be basically realized.³³ For this purpose, the indicator of healthy life expectancy per capita can be introduced to improve simultaneously with the indicator of life expectancy per capita.

Fourth is the Human Development Index (HDI). This indicator is the core indicator of human development advocated by the United Nations, which is a composite indicator based on three dimensions: life expectancy, education level, and quality of life (gross national income per capita, purchasing power parity, 2011 international dollars), using a standardized calculation method. In 2019, China’s Human Development Index reached 0.761, ranking 85th out of 189 countries in the world. By 2035, China’s HDI is expected to improve to 0.850 (see Table 5.4), ranking in the top 40 in the world.³⁴ This is one of the comprehensive measurement markers for China to become a medium-developed country. Gross human development (defined as the product of HDI and total population) will rise from 1.073 billion HDI in 2019 to 1.226 billion HDI in 2035, a cumulative increase of 14.3%, with an average annual growth rate of 0.8%. For this reason, the author particularly recommends the adoption of HDI as the most important indicator for achieving common prosperity for international comparison, and to gain support from the international community (such as the United Nations Human Development Program and other agencies) and third-party assessment. This will greatly promote the global cause of human development and provide Chinese solutions and experience for developing countries to reduce poverty and achieve modernization and common prosperity.

Table 5.4 China’s human development index (2000–2035)

According to the human development trend of each region in China, it is expected that by 2035 all regions in China will enter the extreme high human development index group (see Tables 5.5). In 2020, all regions of the country, except Tibet, which belongs to the medium HDI group, will reach the high HDI level, accounting for 75.7% of the total population; those reaching the extreme high HDI level will account for 23.8% of the total population. All regions of the country will have significantly increased their HDI from 2020 to 2035. The proportion of the population in the high HDI group to the total population will decrease from 75.7% in 2020 to 10.8% in 2035, and the proportion of the population in the extreme high HDI group to the total population will increase from 23.8% in 2020 to 89.2% in 2035 (see Tables 5.5), which indicates that 90% of the Chinese population enters a state of extreme high human development. This is one of the major international markers for achieving common prosperity for everyone in 2035, reflecting the trend of equalization of major public services and the basic convergence of the HDI in all regions of the country, and a strong proof that the Chinese socialist system promotes human development.

Table 5.5 Share of HDI groups in total national population by region (31 regions) (2020–2035) (Unit: %)

In conclusion, the objective to promote common prosperity for all is a cornerstone of the 14th Five-Year Plan and the 2035 vision. It aligns with the interests of over 1.4 billion people and represents a comprehensive approach to enhancing the quality of life for all. The goals are clearly defined and measurable, providing a framework for ongoing monitoring and evaluation, both at the national and local levels. Additionally, the objectives align with the Human Development Index, a widely recognized global benchmark for human progress, and will have a transformative impact on global economic and human development. By striving toward these goals, China aims to lead the way in creating a more equitable and prosperous future for all.

Realizing common prosperity for everyone is a long-term journey that will span multiple stages of development, including the transition to the intermediate stage of socialism and beyond. While the year 2035 serves as a crucial first step toward achieving this goal, it is important to understand that it is just the beginning of a larger and more ambitious objective. Hence, it is imperative to adopt a proactive and determined approach toward this objective, while being grounded in reality and constantly seeking the truth through practical and evidence-based measures. In doing so, we can make substantial progress toward creating a society “where all individuals are able to achieve common prosperity by 2035 and beyond.”³⁵