The Major Task of Promoting Common Prosperity in the New Era

Abstract

The main goal of achieving common prosperity is to comprehensively narrow the gap between urban and rural areas, regional development, and residents’ income, achieve equalization of basic public services for all people, and achieve “more obvious and substantial progress in the common prosperity for everyone” by 2035. This is an important part of China’s socialist modernization strategy to enrich the people (common prosperity) and strengthen the country. For this purpose, according to the Outline of the 14th Five-Year Plan, we propose an action plan to study and formulate how to promote common prosperity and clarify the basic direction, main objectives, key tasks, pathways, methods, and policy measures for common prosperity.

The main goal of achieving common prosperity is to comprehensively narrow the gap between urban and rural areas, regional development, and residents’ income, achieve equalization of basic public services for all people, and achieve “more obvious and substantial progress in the common prosperity for everyone” by 2035. This is an important part of China’s socialist modernization strategy to enrich the people (common prosperity) and strengthen the country. For this purpose, according to the Outline of the 14th Five-Year Plan, we propose an action plan to study and formulate how to promote common prosperity and clarify the basic direction, main objectives, key tasks, pathways, methods, and policy measures for common prosperity.

6.1 Adhere to the Basic Socialist Economic System

Adhere to the basic socialist economic system of China and unswervingly follow the path of common prosperity for everyone. The provisions outlined in the Fourth Plenary Session of the 19th CPC Central Committee clearly defined the basic socialist economic system, which encompasses public ownership as the primary form, while multiple ownership systems coexist and flourish in a joint development model. Labor-based distribution remains the foundation, while multiple distribution methods are allowed to coexist, forming the socialist market-economy system. These elements work together to establish the fundamental principles of the basic socialist economic system. These efforts are critical to promoting common prosperity and will help to build a brighter future for everyone.

In order to achieve common prosperity, it is imperative to adhere to the principles of the socialist market-economy system. This system combines the strengths of a market economy with the basic principles of socialism, maximizing the market's role in resource allocation while also leveraging the government's competence. This results in an effective balance between market forces and government intervention, promoting the creativity and vitality of market participants, and ensuring that the benefits of economic growth are equitably distributed throughout society. An important role of an effective government is to encourage entrepreneurship and ensure employment. The nation’s market subjects are both entrepreneurial subjects and subjects of middle-income groups. On September 6, 2021, the head of the State Administration of Market Supervision pointed out that from 2012 to the end of July 2021, China’s market subjects grew from 55 to 146 million, an increase of nearly 100 million, and individual business households increased from 40 to 98 million. The number of private and individual employment rose from 199.25 million in 2012 to 405.24 million in 2019,¹ more than doubling, increasing its share of national employment from 26.0% to 52.3%, an increase of 26.3%, or an average of 3.8% per year, creating the largest number of new jobs in the world.² By 2035, the total number of market entities in China will increase by another 100 million to 250 million, which are not only the subjects of creating various types of employment, but also the economic subjects of creating various kinds of wealth, and moreover, the social subjects of achieving common prosperity and jointly utilizing and giving full play to the scale effect of the large unified market unique to China.

Adhere to the public sector as the mainstay, the common development of a variety of ownership of the economy. First, vigorously play the important role of the public sector economy in promoting common prosperity. To ensure the sharing of development benefits by all people in China, public ownership and the dominant role of state-owned enterprises play a crucial role as institutional guarantees. They have made significant contributions to advancing national progress, enhancing financial stability, improving living standards, delivering essential public services, reducing disparities in development, and maintaining national security and growth. These institutions also serve as critical support for preserving the CPC's leadership and the socialist system. After more than 70 years of continuous accumulation, China’s state-owned economy has grown and the efficiency of state-owned capital allocation has been continuously improved. By 2020, national state-owned assets will reach 635.2 trillion yuan, equivalent to 988 times the national capital stock in 1978 (643 billion yuan), with an average annual growth rate of 17.8% in nominal terms, exceeding 11.3% from 1952 to 1978,³ equivalent to 6.25 times the total GDP in 2020 (101.6 trillion yuan).⁴ Overall, state-owned assets still dominate the total assets of society, and the state-owned economy still dominates, both of which belong to the common wealth of all people and are the largest resource base for achieving common prosperity for everyone. The Fifth Plenary Session of the 18th CPC Central Committee proposed that “private enterprises should be encouraged to enter more fields in accordance with the law, and non-state capital should be introduced to participate in the reform of state-owned enterprises,” and state-owned enterprises, especially central enterprises, should actively and steadily promote mixed-ownership reform. According to the information released by SASAC, the number of enterprises with mixed-ownership systems in central enterprises accounts for more than 70%, and listed companies have become the main carrier of mixed reform in central enterprises, with 67% of total assets, 65% of operating income and 86% of profits of central enterprises coming from listed companies. The mixed-ownership reform has promoted various types of owned capital to complement each other’s strengths, promote each other, and develop together, effectively improving the allocation and operational efficiency of state-owned capital.⁵ Therefore, based on the fundamental position of the state-owned economy in the national economy, we should firmly support state-owned capital and state-owned enterprises to become stronger, bigger, and better, and enhance the competitiveness, innovation, control, influence, and risk resistance of the state-owned economy. Among them, the number of Chinese enterprises (including Hong Kong) in the “World Top 500” has risen from 9 in 2000 to 124 in 2020, of which 92 are state-owned enterprises. In fact, state-owned enterprises not only have the goal of pursuing corporate efficiency but also undertake the strategic objectives given by the state, such as safeguarding the macro economy, promoting economic development, maintaining national security, achieving social harmony, etc.⁶ It also fully reflects the advantages of state-owned economic system, scientific and technological innovation, international competition, and prevention of major risks. As General Secretary Xi Jinping has repeatedly stressed, “State-owned enterprises are an important material and political foundation of socialism with Chinese characteristics and an important pillar and relying force for the Party to govern and prosper the country.” Second, vigorously develop the non-public economy so that it can play an increasingly large role in promoting common prosperity. Since the reform and opening up, the non-public economy has developed rapidly, playing a role of “half of the mountain” in promoting economic growth, creating jobs, innovating science and technology, increasing tax revenue, etc., and has become an important part of the socialist market economy with Chinese characteristics. The private economy contributes more than 50% of China’s tax revenue, more than 60% of GDP, more than 70% of technological innovation, more than 80% of urban labor employment, more than 90% of the number of enterprises, and has become the largest foreign trade entity in China.⁷ The number of non-state-owned enterprises has grown from small to large and from weak to strong, and the number of them entering the “World Top 500” has increased from 1 in 2004 to 32 in 2020, becoming the “Emerging Corps of China.” The biggest difference with the private economy of western capitalist countries is that both the public economy and the non-public economy in China are important components of the socialist market economy with Chinese characteristics, and are the economic basis for the development of socialist society in China, which can be regarded as the two-legged approach of the eastern giant of China. On the road to “common prosperity,” the two complement each other and give full play to their respective advantages and roles.

Improve the system in which distribution according to labor is the mainstay and multiple modes of distribution coexist. The Decision of the CPC Central Committee on Several Major Issues Concerning Adhering to and Improving the Socialist System with Chinese Characteristics and Promoting the Modernization of the State Governance System and Governance Capability, adopted at the Fourth Plenary Session of the 19th CPC Central Committee, established this system as the basic economic system of China for the first time and adhered to and improved it. The first distribution is to adhere to the socialist principle of distribution according to labor, adhere to the principle of more work for more pay, focus on protecting the labor income of workers, especially raising the labor compensation of front-line workers, continuously increasing the proportion of labor compensation in the initial distribution,⁸ accounting for at least 50% of the total income of the initial distribution,⁹ improve the mechanism of reasonable wage increase, especially raising the income of low-income groups,¹⁰ implement the action plan to expand the middle-income group and continuously increase the proportion of the middle-income group. Insisting on the coexistence of various distribution methods and continuously improving the policy system of distribution according to various production factors (labor, capital, land, knowledge, technology, management, information, etc.) is conducive to mobilizing the enthusiasm of various economic agents to create various social wealth (economic, social, cultural, intellectual and ecological wealth, etc.). The government should promote various types of economic organizations to fulfill not only their external social responsibilities but also their internal social responsibilities, and narrow the income gap within economic organizations. In general, the initial distribution is the result of market allocation of factors, but it is also necessary to focus on regulating the order of the initial distribution. In particular, Wang Shaoguang believes that the most important thing to curb the trend of widening income disparity is to make great efforts in the initial distribution.

Improve the redistribution mechanism. The secondary distribution is to improve the national (government) redistribution adjustment mechanism, the core of which is to build a fiscal and tax policy system that is conducive to common prosperity, establish and improve personal or family income and property information systems, improve the personal income tax system, strengthen tax regulation and supervision of high-income earners, protect legal income, resolutely outlaw illegal income, and reasonably enhance the role of income tax, property tax, and other taxes in regulating income distribution.¹¹ Improve a high-quality social security system covering all people. By 2020, the number of social security card holders nationwide will reach 1.335 billion, directly benefiting more than 120 million retirees. In particular, the basic pension insurance participation rate will increase from more than 90% (999 million people) in 2020 to more than 95% in 2025, achieving full coverage for all people by 2035, while gradually increasing the level of basic pension for urban and rural residents; health service system is more complete, providing basic public services for all people and achieving a significantly higher level of parity.

Emphasize the role of the tertiary distribution, actively develop social philanthropy, and vigorously advocate conscious and voluntary relief of the poor and needy. Vigorously promote corporate ESG investment and continuously enhance the awareness of corporate social responsibility. In addition, actively explores the realization form of the tertiary distribution, with the social system playing a distributive role as the defining standard. Playing the role of the social system for common prosperity and creating a social and cultural atmosphere of wealth for good is also an important aspect of the superiority of the socialist system.

6.2 Comprehensive Implementation of Rural Revitalization Strategy

General Secretary Xi Jinping pointed out that “the modernization of agriculture and rural areas is the general goal of implementing the rural revitalization strategy” and “the work of the three issues of agriculture in the new era must be promoted around the general goal of modernizing agriculture and rural areas.”¹² This is a major shift and upgrade of the focus of China’s “three issues of agriculture.” The 14th Five-Year Plan proposes that “the road of socialist rural revitalization with Chinese characteristics, the comprehensive implementation of the rural revitalization strategy, the strengthening of work to supplement agriculture, urban and rural areas, and the promotion of the formation of a new industrial-agricultural-urban-rural relationship of mutual promotion, complementary urban and rural areas, coordinated development and common prosperity, to accelerate the modernization of agriculture and rural areas.”¹³ This is exactly the way to realize the common prosperity of the rural population.

Enhancing the modernization of agriculture is a pivotal objective in China's agricultural development and an integral part of implementing the rural revitalization strategy. The fundamental way out for agriculture lies in modernization, but the modernization of agriculture in China is not an isolated modernization, but a modernization of “four synchronization,” that is, the “parallel mode” of industrialization, informatization, urbanization, and agricultural modernization.¹⁴ However, among the “four synchronization,” agricultural modernization is the biggest short board but also has the biggest development potential. China can make full use of industrialization, urbanization, informatization, and e-commerce¹⁵ to drive and promote agricultural modernization, give new momentum to agricultural and rural modernization, and innovate a new era of agricultural and rural development model. In the near future, China will make significant progress in agricultural modernization, based on building a modern agricultural industrial system, optimizing the agricultural structure, combining agriculture, forestry, animal husbandry, and fishery, integrating the primary, secondary, and tertiary industries, enhancing the industrial chain and value chain, and improving the economic, ecological and social benefits. The construction of a modern agricultural production technology system and service system is the fundamental support, and we should accelerate the construction of agricultural mechanization, water conservancy, information technology, intelligence, green, standardization, such as to increase the comprehensive mechanization rate of crop cultivation, seeding, and harvesting to 75% by 2025, and to increase to more than 80% by 2035, fundamentally changing the reliance on human and animal power and traditional agricultural production methods of “depend on Heaven for food.” We should also improve the utilization rate of agricultural resources, land productivity, product value-added rate and labor productivity, and enhance the comprehensive agricultural production capacity and risk resistance capacity. With the development of modern agriculture in terms of scale, intensification, and specialization, it is necessary to accelerate the training of a new generation of professional farmers and the formation of high-quality agricultural entrepreneurs and production and management team.

Achieving rural modernization is not only an important goal of China’s modernization but also the goal of implementing a rural revitalization strategy. As General Secretary Xi said, “Rural modernization includes both the modernization of ‘things’ and ‘people’, as well as the modernization of rural governance system and governance capacity. We should adhere to the design of agricultural modernization and rural modernization as one and promote them together to realize the leap from a large agricultural country to a strong agricultural country.”¹⁶ The world modernization process shows that agricultural modernization and rural modernization are a whole and must be integrated and coordinated.

Rural modernization will reach a new level. The goal of “beauty of rural area” is basically realized, and the rural living environment is obviously improved, especially the rural water, electricity, roads, gas, communications, radio and television, logistics, unified planning, standards, construction, and management and services, basically reaching the modernization level of local towns. The rural ecological environment has fundamentally improved, the basic realization of beautiful and livable countryside, so that rural tourism has become a new impetus for rural development. To modernize farmers, China needs to incorporate the training of young individuals in this field into the national practical personnel training program, as requested by General Secretary Xi Jinping, to ensure the success of the agricultural industry.¹⁷ This depends on the modernization of farmers” human capital, which is expected to increase from 31% in 2018 to more than 60% in 2035 for those with high school or higher education and especially to increase the proportion of those with college education or higher, so as to create a large number of new farmers with professionalism, specialization, and high quality and to promote a significant improvement in the quality of farmers’ employment. The goal of “enriching farmers” will be basically achieved, and the productivity and income level of farmers will continue to improve, with agricultural labor productivity expected to increase from 44,000 yuan per person in 2020 to more than 90,000 yuan per person in 2035, and the per capita disposable income of farmers will increase from 17,100 yuan to more than 35,000 yuan, equivalent to a daily income of more than 22 international dollars per person and the proportion of low income continues to decrease. The aim of modernizing rural governance has been largely attained, with rural grassroots party organizations serving as the driving force behind the promotion of rural governance. They lead the way for farmers to establish various cooperatives, expand new collective and mixed economies, revitalize underutilized rural resources, and foster collective and farmer-led shareholder initiatives. We should also actively expand the channels for farmers to increase their income, increase their income from various types of property (property, agricultural land, and forestry, agricultural machinery, financial assets, etc.), introduce various kinds of social capital, vigorously develop the rural mixed-ownership economy, grow the rural collective economy and increase the collective income of rural areas. Refine regular support mechanism for rural low-income population, including the provision of rural public welfare jobs, increase labor income, and lead farmers on the road to common prosperity.

The implementation of a rural revitalization strategy requires promoting integrated urban–rural development and continuously narrowing the development gap between urban and rural areas. In terms of policy orientation, it should accelerate the integration of urban and rural infrastructure construction, promote the connection of urban and rural markets, promote the convergence of income and consumption expenditure of urban and rural residents, equalize basic public services, unify standards and parallel systems.¹⁸ The implementation of China’s rural revitalization strategy should be integrated with the development of new urbanization, so as to be focused, distinctive, and sustainable.

Strengthen the regular support for the rural low-income population. Carry out dynamic monitoring of the rural low-income population and implement tiered and classified assistance. For the rural low-income population with working ability, China insists on development-type assistance, and help them improve their endogenous development ability through developing industries and improving their employment capacity so that they can become rich by hard work. For those who have lost their working ability, based on the existing social security system, they will be included in the scope of rural low-income insurance or special hardship assistance and support, and given special assistance and temporary assistance according to the type of difficulty in a timely manner.¹⁹ After the completion of the target task of poverty eradication, the 14th Five-Year period should serve as a consolidation phase for poverty eradication in counties under poverty, so as to “ride with someone after helping the person get on a horse.” During the transition period, we should maintain the overall stability of the existing major support policies, and optimize and adjust them one by one, reasonably grasp the rhythm, strength, and time frame, gradually realize a smooth transition from concentrating resources to support poverty eradication to comprehensively promote rural revitalization, and promote the historical shift of the focus of the “three issues of agriculture” work. China has also been working on the implementation of various policies to ensure that no gaps are left in the work and no gaps are left in the policies.

6.3 Comprehensive Implementation of the New Urbanization Strategy Era of Socialism with Chinese Characteristics

The new urbanization is people-oriented urbanization with the goal of improving the inclusiveness, livability, and sustainability of urban development. In the future, China’s new urbanization still has huge development space and social demand and continues to absorb new citizens on a large scale, absorbing at least 200 million rural transfer population by 2035. In 2020, the urbanization rate of China’s resident population was 63.89%, while the urbanization rate of the household population was only 45.4%, so there is still much room for improvement and the gap between the two indicators needs to be significantly reduced. By 2035, the urbanization rate of the resident population will reach about 80%, and the population size will expand from 900 million in 2020 to about 1.16 billion, an increase of about 260 million people. Even so, it is still smaller than the scale of 340 million new permanent residents in urban areas from 2005 to 2020. Increasing the urbanization rate of the resident population is still the biggest driving force for China’s economic development and social progress in the future, and it is also a key area to realize the common prosperity of everyone. The main policy measures include the following aspects.

First, deepen and accelerate the implementation of the reform of the household registration system to speed up the civilization of the agricultural transfer population. In 2020, the proportion of urban population in the country’s total population was 63.89%, but there were still 261 million people with agricultural registration, which can be increased by 18.5% if they are converted locally. According to the 14th Five-Year Plan, two major household settlement targets and policies will be implemented as a matter of priority: to abolish all household settlement restrictions in cities with a resident population of less than 3 million, to fully relax the conditions for settling in large Type I cities with a resident population of 3–5 million, and to gradually implement the policy of integrating household settlement in mega cities with a resident population of more than 5 million. By around 2030, the majority of large cities and mega-cities nationwide will basically implement a residence permit system to replace the household registration system. Therefore, the essence of accelerating the urbanization process is to speed up the citizenship of the agricultural household population, accelerate the transfer of farmers, and reduce them on a large scale in order to make them rich.

Second, further improve the coverage level and access level of the basic public service system. Basic public services such as pensions, medical care, and education are provided to urban residents based on their place of permanent residence. Social security for individuals can be transferred across provinces to facilitate settlement in different places. The central transfer payments should fully consider the financial affordability of public service expenditures in each region, and continuously improve the level of equalization of basic public services between regions and between urban and rural areas. Local governments should conduct a comprehensive inventory of public property resources and invest in them as property resources to serve the “old and young” population, so as to reduce the number of elderly people and children left behind in rural areas.

Third, actively promote the construction of urbanization with the county as the main carrier. This is an important carrier for absorbing the local rural population and the population of small towns. County economic development is an important task for China’s urbanization in the future, and it is also the most fundamental driving force for the development of county urbanization. As China’s urbanization moves to a higher level, the economic development of counties in different regions of China will show relative differentiation, and the population distribution in different counties will also change significantly. Therefore, to effectively grasp the direction of county urbanization development, it is important to leverage the strengths of local resources and industries to drive county economic growth while also aligning with China’s overall urbanization trend and avoiding excessive construction of county towns. Furthermore, the potential of digital technology should be fully harnessed to boost the inherent driving force of county economic development.

6.4 Comprehensively Achieve Full Parity of Basic Public Services

We must insist on doing our best and living within our means to improve the public service policy system.²⁰ To promote the well-being of all and address issues of social justice, ensuring equal access to basic public services is crucial. The government's investment in these services, which include education, employment, insurance, health care, social services, housing, and culture, is a testament to the strengths of China's socialist system and its ability to provide high-quality services at a low cost to the population. By continuously improving these services, China can work toward creating a fairer and more equitable society for all. Building upon the framework of the 14th Five-Year Plan, the government aims to further clarify the goals for providing basic public services by 2030 and 2035. This will involve refining national standards and making necessary adjustments to better serve the needs of the population. The goal is to establish a system of providing basic public services based on the place of permanent residence, ensuring equal access for all residents in both urban and rural areas. The quality and level of basic public services will be improved in line with economic development and per capita income, with a focus on closing the gap in service standards between urban and rural areas. The government also aims to accelerate the process of integrating urban and rural areas and unifying basic public service standards,²¹ with a specific emphasis on improving the standard and availability of basic public services in rural communities, to ensure full coverage and equal access to all.

Clarify the responsibilities of governments at all levels to provide basic public services. Reasonably increase the central and provincial governments’ responsibilities for basic public services and expenditures, with emphasis on continuously improving the integrated service management platform at the grassroots level, improving the standardization, specialization, and informatization of public services provided by grassroots governments, and innovating the way public services are provided.

Vigorously promote the equalization of non-basic public services. Accelerate the development of standards and lists of non-basic public services, support the participation of various social parties, and expand the supply of inclusive services, including the provision of diverse non-basic public services in diverse ways such as public construction and private operation, government purchase of services, and government-society cooperation, to meet the diverse livelihood needs of all parties and promote the development of diverse local service industries.

Improve the public service policy guarantee system. The first is to continuously increase the proportion of general public budget revenue to GDP, reaching 22% in 2015 in the first step and further increasing it to about 25% in the second step in order to basically meet the basic public service needs of more than 1.4 billion people. The second is to improve the efficiency of basic public services, including the size of the population served, key populations, and key regions, and the improvement of major livelihood indicators, especially employment, social security, healthcare, education, culture, and people in need (such as low-income people and the disabled). In particular, the priority is to promote the national coordination of basic pension insurance, which will help protect and facilitate the payment of pensions to the elderly population.

6.5 Focuses on Supporting Special Types of Areas’ Comprehensive Revitalization and Development

China’s regional unbalanced development characteristics will persist for a long time, and we should focus on implementing a comprehensive revitalization development strategy with the whole country’s efforts. This includes old revolutionary regions (Central Soviet Region, Shaanxi-Gan Ning, Dabie Mountain Region, Left, and Right River Region, Sichuan-Shaanxi and Yimeng Old Region), ethnic regions, border region,²² areas out of poverty,²³ ecological degradation areas (including high altitude areas), resource depletion areas and old industrial cities, involving nearly 400 million people.²⁴ These areas are relatively backward in terms of economic and social development levels and have become the prominent short board of China’s coordinated regional development. They are also fragile ecological environment areas in China and are responsible for important functions such as ecological security, energy security, border security, etc. They are the most difficult and important part of the national coordinated regional development strategy and require the country to implement a comprehensive revitalization strategy.

We should implement the grand strategies of sustainable development, high-quality development, green development, synergistic development, and common development, gradually realizing the goal of common prosperity, and make efforts to promote the comprehensive revitalization and development of special types of areas. Precise policies will be applied to different types of areas to solve the long-term support mechanism for relative poverty and continuously stimulate endogenous development momentum, and it is expected that after three five-year plans, by 2035 special types of areas will be higher than the national average in terms of per capita gross regional product and per capita income of residents. The above policies will strive to narrow the gap with the national average, strive for basic public services to approach or reach the national average, improve infrastructure interconnection and interoperability, improve the level of economic, social, and ecological development, and gradually narrow the development gap between special type areas and developed areas.

The National Development and Reform Commission’s “14th Five-Year Plan for the Revitalization and Development of Special Types of Regions” has constructed a “1+N” policy system for comprehensive revitalization. To enhance regional development, separate plans should be created for each type of region. The mechanism for central coordination, provincial overall responsibility, and city and county implementation should be improved. This will address long-standing issues such as the underdeveloped economy, homogeneous industrial structure, low-income level of residents, inadequate basic public services, poor infrastructure interconnectivity and efficiency, resource depletion, and poor ecological environment. Accurately positioning regional development, implementing policies effectively, and improving long-term support mechanisms will increase the capacity and power of endogenous development. The well-being of the people should be the core goal, and new models and approaches to revitalizing development should be developed. The unique cultural, ethnic, and ecological advantages should be transformed into economic advantages, special tourism industries should be developed, and the protection of border, ecological, resource, and industrial security should be strengthened. These efforts, along with the provision of national and regional public products, will contribute to the prosperity and strength of the entire country.

6.6 Focus on Helping Low-Income People with Special Difficulties

The low-income group mainly refers to 20% of low-income households, with about 282 million people belonging to about 100 million households. In 2020, the per capita disposable income of low-income people was 7869 yuan, equivalent to 5.2 international dollars per person per day, and even if the per capita income doubles by 2035, it will only reach more than 10 international dollars per person per day, close to the international middle-income bottom line. This part of the population is roughly divided into two main categories: a group of people in difficulty who lack the ability to work and lack income. By the end of 2019, there were 11.53 million people with disabilities in difficulty and 14.33 million people with severe disabilities in China respectively, totaling 25.86 million people, accounting for 1.85% of China’s total population, and the subsidy coverage rate reached 100%. At present, this group is basically included in the minimum living security. By the end of 2020, more than 7 million poor people with disabilities who have established their own cards will be lifted out of poverty, 9.634 million people with disabilities will be included in the minimum living security, and nearly 3 million poor people with severe disabilities will be separately insured.²⁵ This group, totaling 19.634 million people, accounting for 1.40% of the total population, is still a special group of people that the state will focus on helping. The state should continue to strengthen the implementation of the special system of living allowance for people with disabilities in difficulty and care allowance for people with serious illnesses, and ensure that basic social security (medical insurance, pension, low-income insurance, etc.) is covered as much as possible, and gradually raise the level of minimum living security to cover the bottom line of basic living, so as to “send charcoal in snow” for people with special difficulties. It is necessary to improve the employment support system for people with disabilities, and provide support in employment, training, and labor protection, so that they can have the opportunity to create wealth and achieve some degree of economic independence, fully reflecting the superiority of the socialist system. The other category is the 20% of the country’s low-income households living mainly in rural areas, central and western regions, and ecologically fragile areas. They have the ability and willingness to work but mainly lack labor opportunities (equivalent to surplus labor), moreover, they lack opportunities to increase their income. This requires creating more development opportunities for them to transform from agricultural labor to non-agricultural labor, from agricultural population to non-agricultural population, and from unskilled labor to skilled labor, so that their income from labor will keep increasing as a proportion of household income.²⁶ The state should vigorously help them get out of their difficulties and move from the low-income level (7869 yuan per capita income in 2020, equivalent to 5.2 international dollars per person per day) to the middle-income level (15,000 yuan per year, equivalent to 10 international dollars per person per day) as early as possible and keep growing their income level.

How to determine the minimum living security expenditure standard in China? There are two different standards to choose from: one is to continue to set the domestic minimum income standard. For example, on the basis of the current rural poverty standard in 2010, the 2020 rural minimum living security expenditure standard will be 4600–5000 yuan, which is equivalent to roughly two times the 2010 standard (2300 yuan). 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, striving to reach more than 25,000 yuan by 2035 at 2020 prices.²⁷ To this end, the state empowers localities (at the provincial level) to establish a minimum standard of rural per capita disposable income and continuously adjust upward the local minimum living security expenditure standard. The other is that reference is made to international standards. For example, the World Bank International High Poverty Line Standard is 5.5 international dollars per person per day. According to this poverty line standard, China’s poverty incidence rate dropped from 53.5% in 2010 to 24.0% in 2016, a decrease of 29.5%, or about 4.9% per year on average, which is significantly lower than the world average poverty incidence rate (44.8%), slightly higher than the poverty incidence rate in middle- and high-income countries (22%), and significantly higher than the poverty incidence rate in high-income countries (1.5%).²⁸ Referring to the World Bank’s private consumption purchasing power factor, the daily income per person in rural areas in poor areas of the country rises from 4.3 international dollars in 2013 to 8.2 international dollars in 2020.²⁹ Taking into consideration the various policy subsidies offered by the government to rural residents, such as the waiver of school fees and miscellaneous expenses for compulsory education, free textbooks and subsidized living expenses for boarding students from economically disadvantaged families, basic and major medical insurance, medical assistance (with a reduction in per capita comprehensive protection of 474 RMB), and the renovation of dangerous houses (with an average household subsidy of 16,000 RMB), the actual economic welfare of rural residents in China surpasses the international high poverty line. It is due to China's unprecedented effort in the war against poverty during the 13th Five-Year Plan period that by 2020, the number of people living in poverty under the international high poverty line has been significantly reduced. By 2035, the per capita disposable income in poor areas in China is expected to more than double, with a per capita daily income of over 16.4 international dollars, bringing it within the international middle-income income range.

It should be noted that among the main indicators of economic and social development in the 14th Five-Year Plan, there are seven indicators of people’s livelihood and well-being, and “elimination of poverty among the rural poor” is no longer included as an indicator, but this does not mean that China’s task of eliminating poverty has been completed. According to the poverty line standard of 5.5 international dollars per person per day, there will still be about 5% of China’s population in 2020, i.e., about 70 million people in poverty. It is expected that by the end of the 14th Five-Year Plan, China will have basically eliminated poverty under the high international poverty line standard of the World Bank, and the original poverty eradication achievements will be further consolidated. China will move from the stage of eliminating absolute poverty to the stage of reducing relative poverty, and will fully utilize more than 90% of the population, i.e., 1.27 billion people, to help 70 million people on the international high poverty line to get out of poverty permanently. Since China’s total population base is so large that any one percentage point of relative poverty incidence involves about 14 million people, the term “special hardship group” can be used in practice to implement different target-oriented and precise assistance policies according to different special hardship groups.

In conclusion, building China into the world’s largest society of common prosperity is a long-term, difficult, yet great task, which will create a new path for human development. The most fundamental reason why China has been able to build the world’s largest society of absolute poverty into the world’s largest society of moderate to high income in the past 40 years or so is the correct leadership of the Communist Party of China. If “without the Communist Party, there would be no New China,” then “without the Communist Party, there would be no moderately prosperous China.” Similarly, in the future, “without the CPC, China will not be able to achieve common prosperity.”