Policy Ideas for Promoting Common Prosperity

Abstract

In accordance with the Outline of the 14th Five-Year Plan of the National Economic and Social Development of the People's Republic of China and the Vision 2035, we will formulate an action program and implementation plan to achieve common prosperity by 2035 and define the main ways of development in the political, economic, social, cultural, and ecological construction fields.

7.1 Formulation of an Action Platform to Promote Common Prosperity

In accordance with the Outline of the 14th Five-Year Plan of the National Economic and Social Development of the People's Republic of China and the Vision 2035, we will formulate an action program and implementation plan to achieve common prosperity by 2035 and define the main ways of development in the political, economic, social, cultural, and ecological construction fields.

Develop a policy system to promote common prosperity, mainly including high-quality development, income growth and income distribution, entrepreneurship and employment policy, education and development of human resources policy, equalization of basic public services and non-basic public services policy, social security and transfer payment policy, regional coordinated development policy, and urban–rural integration and development policy.

It is necessary to both adhere to the national overall and integrated planning and encourage regional initiatives and innovation, demonstrating their capabilities. In view of the fact that the incomes of various categories of China's population will exceed the international standard bottom line of middle income (per capita income or expenditure of 10–100 international dollars per person per day) in 2021–2035,¹ due to the great differences in actual living standards and price levels in different regions, it is suggested that instead of using the national statistical caliber of relatively poor people in developed countries, we can continue to follow the caliber of urban and rural people or families in difficulty, gradually unify the minimum income guarantee system for urban and rural residents, and use the minimum income guarantee as a source of income pockets for special groups. In fact, the minimum security system for urban and rural residents becomes a direct transfer payment from the government to special groups of people. The local minimum income guarantee standard, determined by each region according to the level of development and ability, should be included in the local implementation program as the main responsibility. The central government financing to the central and Western regions and other areas, especially the areas that have been out of poverty, continue to increase direct subsidies to support the efforts of the state redistribution function. In addition, the minimum income guarantee system should be integrated with the pension system, so that eventually all non-working individuals are covered by social security.

7.2 Promoting Common Prosperity in Quality Development

Promoting common prosperity is characteristic of the times. In the new era of socialism with Chinese characteristics, the promotion of common prosperity must be based on high-quality development and the overall layout of the “Five-in-One.” To achieve the goal of common prosperity, we must first make the “pie” bigger and better through the common struggle of the whole nation, and then cut and divide the “pie” well through reasonable institutional arrangements. This is a long-term historical process, and we should steadily move toward this goal.²

China's economy has entered the stage of high-quality development. High-quality development must fully embody the new development concept, that is, development in which innovation becomes the first driving force, coordination becomes an endogenous feature, green becomes the universal form, openness becomes the necessary path, and sharing becomes the fundamental purpose. High-quality development is the development to better meet the growing needs of more than 1.4 billion people for a better life. Entering a new stage of development, the Party Central Committee with Comrade Xi Jinping as the core places the realization of common prosperity for all people on a more important position and must insist on promoting common prosperity through promoting high-quality development and through common hard work.³

Our society will move into the high human development group. This means that the whole country will move from a high human development level to a very high human development level (HDI > 0.800) (see Tables 5.4 and 5.5). It means that the country's economic development, people's health, and education level as a whole will move to another new level, marking a significant increase in the level of common wealth.

Develop the sharing economy in an orderly and regulated manner to improve the efficiency of resource utilization. The sharing economy is an innovative business form that emerged with the change of digital interconnection technology, which can improve the efficiency of resource utilization and thus the quality of economic growth, and can transform the economic growth model by sharing resources and innovative production methods. The development of the sharing economy can help create jobs and promote common prosperity. China has the largest number of Internet users in the world and has several fast-growing digital platforms, which along with the formation of a new form of social sharing economy have become a new way to promote common prosperity. According to the Annual Report on the Development of China's Sharing Economy (2021), China's sharing economy will have a transaction size of 3.38 trillion yuan in 2020, accounting for 3.3% of the country's total GDP. The number of participants in the sharing economy is about 830 million, accounting for 58.8% of the total population, and the number of people involved in providing services is about 84 million, equivalent to 11.2% of the total employment. From 2021 to 2035, the average annual growth rate of China's sharing economy will remain above 10%. The sharing economy has become a new type of socialist economic form with Chinese characteristics, a green and sustainable development model, and has created uncountable jobs and channels to get rich.

At the same time, in order to protect the massive amount of personal information and consumers’ rights and interests, effective market behavior regulation, guidance, supervision and governance should be carried out in order to guide and encourage the orderly development of the sharing economy and make it an important way to achieve common prosperity. In addition, we should give full recognition to the positive role of the sharing economy in “stabilizing employment” and “protecting people's livelihood” through flexible employment mode, and at the same time, we should strengthen the guidance to the sharing economy platform enterprises, clarify the social responsibility of the platform enterprises, and proactively protect the rights and interests of employed people. At the same time, it is necessary to strengthen the guidance for sharing economy platform enterprises, clarify the social responsibility of platform enterprises, and proactively protect the rights and interests of the employees of such enterprises.

7.3 Adhere to the Basic National Policy of Giving Priority to Employment

Common prosperity has to be achieved through hard work and wisdom, which requires common prosperity to be achieved with fuller and higher-quality employment as the basic guarantee, not only to create more employment opportunities and achieve employment equity but also to enable those who are employed to love their jobs and improve the sense of access and self-fulfillment opportunities of those who are employed.

Employment has always been the largest source of livelihood in China, and our Party has always placed employment as a priority in economic and social development. The reason why China has achieved the first 100-year goal of building a moderately prosperous society on schedule is that the Party Central Committee and the State Council have always placed employment in a prominent position in economic development, effectively implemented the employment priority strategy, promoted the continuous expansion of employment in China's cities and towns, and continuously absorbed rural labor, so that the scale of rural employment continued to decline and the number of agricultural laborers transferred continued to remain high. 2000–2020, the number of urban employment nationwide has increased by 231.2 million, an average annual increase of 11.56 million,⁴ creating the largest employment and new jobs in the world.

In the future, with the further development of urbanization in China, the pressure to create jobs in cities and towns will remain heavy. It is expected that by 2035, the scale of urban employment in China may increase by about 150 million people, adding more than 10 million people each year, rising from 460 million in 2020 to more than 600 million. The Party Central Committee has put forward the general goal of employment work in the new era, namely to strive for fuller and higher-quality employment. To this end, it is important to continue the practice of prioritizing employment in macro policies. First, to achieve the goal of fuller employment, do everything possible to expand urban employment capacity, to ensure that more than 10 million new urban jobs are created each year,⁵ and to fully absorb the rural migrant urban labor force as well as key groups such as retired military personnel. The second is to promote the optimization of employment structure. The tertiary industry has become the largest industry in absorbing new employment and transferring employment and is expected to increase its share of total employment from 47.7% in 2020 to over 60% in 2035. The policy orientation should further create policy dividends for the development of the tertiary industry, especially to give full play to the role of new industries, new business models, and new modes within the tertiary sector. Third, to achieve the goal of higher-quality employment, to ensure that the level of labor compensation or wages and labor productivity increase in parallel and continuously but also to make employment an important way for workers to improve the level of human capital. Fourth is to promote the continuous improvement of labor market and facilitate the movement of labor from low-productivity sectors to high-productivity sectors. Fifth is to achieve the goal of high-quality entrepreneurship, create a favorable entrepreneurial environment for the whole society, comprehensively improve the employment and entrepreneurial ability of workers, encourage employment first and then entrepreneurship, encourage and support market players, especially for micro and small enterprises, individual entrepreneurs and other market players to create a favorable entrepreneurial and development environment, and give full play to their role in creating and absorbing new employment.⁶ Sixth, to encourage and support new employment forms such as self-employment, flexible employment, and flexible employment for all kinds of people, to provide conditions for flexible employment to participate in insurance, and to provide standardized and authoritative recognition services for vocational qualifications of freelancers. Seventh, improve the monitoring and early warning mechanism of employment demand and unemployment, control the urban survey unemployment rate to 5.3% or less, and help the unemployed to train or change jobs for re-employment. Even if the survey unemployment rate is controlled at around 5%, there will still be 25–30 million unemployed people. This becomes the biggest challenge to achieving common prosperity. Therefore, the highest priority must always be given to continuously creating new jobs and effectively controlling the unemployment rate, and using the balance of unemployment insurance benefits mainly for retraining and re-employment of the unemployed (including urban migrant workers).

Improve the quality of human capital and professional skills of the whole society. China's talent workstation is at a new historical starting point, and already has a large scale, excellent quality, constantly optimized structure, and increasingly prominent role of the talent team.⁷ China's university-educated population ranks first in the world, and its advantages have become more prominent. It is expected that by 2025, the population of college-educated people in China will rise from 218 million in 2020 to 266 million, and further rise to 393 million by 2035, surpassing the total population of the United States. The human capital level of China's labor force will continue to improve, with the average years of education of the working-age population rising from 10.8 years in 2020 to 11.3 years in 2025 and 12.3 years in 2035. In 2020, there are more than 200 million skilled workers nationwide, accounting for 26.7% of total employment, which is an important source of middle-income group that gets rich by labor and skills. Among them, 58 million people are highly skilled, accounting for nearly 30% of the skilled personnel. “In the 14th Five-Year Plan period, it is expected that there will be more than 40 million new skilled personnel, and the world's largest army of highly skilled labor force will be built. By 2035, China will become the world's most important talent and innovation highland, science and technology innovation team to make important progress, to become the world's largest scale of various types of talent countries. Among them, the full-time equivalent of China's personnel engaged in research and experimental development (R&D) activities will grow from 5.09 million person-years to more than 10 million person-years, and the R&D manpower investment will double. By 2035, China will have a clear advantage in the competition for talent in many fields, and the country's strategic scientific and technological forces and high-level talent ranks among the world's top.⁸

Promote equal employment opportunities for men and women and narrow the gap between men's and women's labor remuneration and pensions. In 2020, the proportion of women in China's total population will be 48.8%; in 2019, the proportion of women in China's total labor force will be 43.6%, which is already close to the average of OECD countries (44.4%). The labor force participation rate of women (aged 15–64) in China is as high as 68.6%, which is also higher than the average of OECD countries (64.8%). According to data published by UNESCO, the gross enrollment rate of women in higher education in China has increased from 13.9% in 2003 to 63.9% in 2020, while the gross enrollment rate of men in higher education has increased from 16.9% to 53.6% in the same period.⁹ With female life expectancy per capita and healthy life expectancy continuing to be higher than that of males,¹⁰ the condition is ripe for a gradual increase in the retirement age of the female workforce. At the same time, increasing labor compensation and pension levels in the female labor market is a major policy that is conducive to the compatibility of national prosperity and personal enrichment incentives.

7.4 Optimization of Income Distribution Structure

Adhere to the socialist principle of distribution according to labor as the main body, a variety of distribution methods coexist, improve the income distribution system, and optimize the income distribution structure.

Some scholars believe that under the socialist system, the basic principle of distribution according to factor inputs is to take distribution according to labor as the mainstay and other distribution methods as a supplement. At the current stage of development, the distribution according to labor has balanced efficiency and fairness. It is necessary to “insist on more work and more pay, focus on protecting the income of labor, increase the labor remuneration of workers, especially front-line workers, and raise the proportion of labor remuneration in the initial distribution.”¹¹ Encourage enterprises to establish a system of employee stock ownership and implement a system of profit sharing or excess profit sharing.

The country's economic development should insist on achieving the basic synchronization of the growth of residents’ income with economic growth as an important goal. It is expected that from 2021 to 2035, the growth rate of per capita income of residents will be maintained at about 5%, and the income of residents (at constant prices) will be doubled from 32,200 yuan in 2020 to 64,400 yuan in 2035, which is equivalent to an increase from 21 international dollars to more than 42 international dollars per person per day. The total size of the middle-income population will be more than doubled, thus driving the level of per capita consumption of residents, leading to a simultaneous doubling of per capita consumption and total consumption of the population.

Adhere to the basic synchronization of labor compensation increase and labor productivity increase. It is expected that from 2021 to 2035, the real wages of people employed in urban units will increase at a rate of about 6%.¹² The average monetary wage will increase from 97,400 yuan in 2020 to 233,000 yuan in 2035. At the same time, the minimum wage is reasonably raised, which is also an important step to prevent the income gap from widening. Each region can decide on its own to adjust the monthly minimum wage according to the local cost of living as well as economic growth.¹³

Increase the proportion of labor remuneration in the initial distribution. Distribution according to labor is still the main source of income for residents in China. Among them, wage income is an important part of labor income. The share of wage income in the national per capita disposable income of residents is dominant, with a national average of 55.7% in 2020, including 60.2% in urban areas, down 5.0 percentage points from 65.2% in 2010, and 40.7% in rural areas, basically the same as the 41.0% in 2010. We should continue to invest in the human capital (education and training) of workers, continuously increase the number of years of education per capita as well as increase vocational education and training to continuously improve the skill level of workers, which in turn will continuously improve the total labor productivity and continuously increase the proportion of wage income.

Expand the channels of income growth for residents and promote diversification of income sources for urban and rural residents. Encourage and support all kinds of entrepreneurship to increase net business income, which is also essentially labor income; encourage diversified investment of households to increase net property income.

Improve multi-level social security system, and gradually achieve universal coverage, urban and rural areas, fair and uniform. Reasonably divide the sharing of pension responsibilities among the state, units, and individuals, and provide institutional guarantee for individual accumulation of pensions. With the growth of economic and financial strength, gradually raise the basic pension standard and the minimum guaranteed income standard for urban and rural residents, and increase the net income from transfer payments, especially to increase the level of social security for the aging rural population.

Improve the social insurance system, achieve full coverage of unemployment insurance and work injury insurance for workers (especially urban migrant workers and flexibly employed workers, etc.), and increase the coverage of corporate pension insurance. Improve the multi-pillar pension insurance system, encourage the development of corporate and occupational pension systems, and vigorously develop the third pillar of pension insurance. By the end of 2020, the size of corporate pensions will be 2.25 trillion yuan, accounting for 2.2% of the total GDP, with great room for development; accelerate the development of the third pillar of pension insurance nationwide, encourage insurance industry practitioners to innovate commercial pension insurance products, and regulate commercial insurance development.

Improve the social assistance system. No matter how much China has grown, there will always be people with special difficulties and low-income families, so it is necessary to establish and improve the basic livelihood assistance system, such as the implementation of basic income assistance, so that the assistance recipients can meet the local minimum wage and minimum living standards, and the implementation of special assistance services. In particular, the level of special subsidies for people with disabilities should be continuously increased, and the growth rate of subsidies should be higher than the growth rate of national or local per capita disposable income, so as to cover the bottom of the pile and reflect “humanistic care and fair priority” for them. Promote the development of social charity, play the role of charity and other third distribution, and improve financial and tax incentives.

Regulate the order of income distribution and reasonably regulate excessive income. We should reject egalitarianism, killing the rich to help the poor, killing the rich to become poor, or falling into the trap of welfarism. More than 1.4 billion people will step into modernization together through joint efforts.¹⁴

7.5 Building a Family-Friendly Society

China has already entered a period of accelerated population aging and childlessness. Population aging will be the basic national condition of China for a long period of time in the future. In 2000, the proportion of China's population aged 65 and above was 6.96%, and it rose to 13.50% in 2020.¹⁵ The proportion of China's population aged 65 and above in the world population aged 65 and above has increased from 20.5% in 2000 to 23.3% in 2020, which is higher than the proportion of China's population in the world population.¹⁶ According to the population growth model, China's population aged 65 and above will increase from 190 to 327 million from 2020 to 2035, an increase of 136 million people, and an average annual increase of 9 million people, with an average annual growth rate of 3.7%. The proportion of population aged 65 and above will increase from 13.5% in 2020 to 22.5% in 2035, significantly higher than that of the OCED countries at 17.4%.¹⁷ The total number of aging population is large, the growth rate is fast, there are large geographical differences, the population is aging before it gets rich, the pension gap is widening, the elderly service industry is underdeveloped, and a significant number of the elderly population has become a relatively low-income group. At the same time, China is also gradually entering an unprecedented period of less childbearing, with the proportion of young children (0–14 years old) continuing to decrease and starting to fall below that of OECD countries. In the future, the problem of “the old and the young” will become two major challenges for China's demographic situation. On the one hand, the aging of the population will generally increase the burden of social pensions and reduce the willingness to have children, which in turn will aggravate the aging of the population; on the other hand, the increase in the number of young children may be more serious than the aging of the population, which in turn will aggravate the aging of the population.¹⁸

To this end, the Central Committee of the Communist Party of China and the State Council have formulated a Medium and Long-term National Plan for Actively Coping with Population Aging, which clearly puts forward three stages of goals: by 2022, China's institutional framework for actively coping with population aging will be initially established; by 2035, the institutional arrangements for actively coping with population aging will be more scientific and effective; by the middle of this century, the institutional arrangements for coping with population aging that are compatible with a strong modernized socialist country. By the middle of this century, the institutional arrangements for coping with population aging will be mature and complete. It also makes strategic arrangements and specific tasks, including: first, consolidating the social wealth reserve to cope with population aging. Second, to improve the effective supply of labor in the context of population aging. Third, to create a high-quality service and product supply system for the elderly. Fourth, to strengthen the scientific and technological innovation capacity to cope with population aging. Fifth, to build a social environment of old age, filial piety and respect for the elderly, to build an age-friendly society,¹⁹ i.e., a social service system of “fun for the elderly, learning for the elderly, achieving for the elderly, nurturing for the elderly and having medical care for the elderly,” to further develop the world's largest social service industry for the elderly, to improve the level of happiness of the elderly, and to come out with a social service system with Chinese characteristics. We will make a positive response to the aging of the population with Chinese characteristics, as General Secretary Xi Jinping asked, “Let the elderly share the fruits of reform and development and enjoy their old age peacefully.”²⁰

Building a family-friendly society with Chinese characteristics. According to the data of the 7th National Census, China's total population reached 1.41 billion people, and the number of family households rose from 400 million in 2010 to 490 million, with an average annual increase of nearly 10 million households, and the average size of family households decreased from 3.10 persons in 2010 to 2.62 persons in 2020.²¹ By 2030, China's family households will further rise to nearly 600 million. To this end, we should not only adhere to the people-centered but also adhere to the family-centered, to build a “family-friendly” society with Chinese characteristics as the goal, in-depth implementation of the family happiness and well-being project.²²

First, to build a “child-friendly” society. The main objectives include developing child welfare, promoting gender equality, and promoting work-family balance. Within families, we should promote equality between husband and wife, shared childcare and other family affairs, and harmonious family building. We will continue to improve the external support system for families, effectively reduce the cost of living for families, promote the maturation of policies and systems for family reunification, family stability and harmony, and actively promote the implementation of the new fertility policy.

In 2020, the total number of elderly people over 60 years old in China reached 264 million and will exceed 300 million in the 14th Five-Year Plan period. General Secretary Xi Jinping pointed out that we should look at the aging society and the life of the elderly positively.²³ The main goal is to create a social culture of tolerance, acceptance, respect, and help for the elderly. By 2030, life expectancy per capita in China will reach 79 years, and the population of elderly people aged 60 and above will reach 380 million. With reference to the successful practice of precise poverty alleviation, implement precise help policy measures for them by age group and service type: the low-age elderly population (60–69 years old), of which this part of the elderly population with advantages such as experience and skills, relatively good physical condition and able to take care of themselves, is the main force to develop the elderly power capital; the middle age elderly population (70–79 years old), which can be divided into self-care, semi-self-care, and full-care types, and adopt flexible and personalized policies; the senior population aged 80 and above, which is the key group for care and support. While actively advocating aging at home, we are vigorously developing social elderly services, public welfare-type elderly institutions, and commercial elderly institutions that meet different needs for elderly services.

Third, to build a “health-friendly” society, the main objectives include improving the medical security system, strengthening the level of health services and management investing in the public health security system, promoting the equalization of public health services, and popularizing public health care knowledge; establishing a “broad coverage, high efficiency, and moderate level” medical treatment and assistance system; developing a cutting-edge medical scientific research and development system, and promoting the coordinated development of Chinese and Western medical science; and building a “health-friendly” service community, so that “the old and the young” become the main recipients of services, providing precise public health and medical services.

The fourth is to give full play to China's unique social advantage of “women can hold up half the sky” and the advantages of a large country's scale. In the concrete implementation of the measures proposed in the 14th Five-Year Plan to “gradually delay the statutory retirement age,” the implementation can be categorized and adjusted in small steps.²⁴ It is suggested that the retirement age for women with a college degree or above be the same as that for men. In particular, life expectancy per capita for women is 5.8 years higher than that for men. (2015 national data),²⁵ but the retirement age for women is five years before men. In addition, China's female human capital is getting higher, with the gross enrollment rate of women in higher education increasing from 13.9% in 2003 to 63.9% in 2020, an increase of 50 percentage points,²⁶ the world's fastest-growing country in terms of gross enrollment rate in higher education, and women are truly “half the sky” in all walks of life. This requires the full play and use of China's unique “women can hold half the sky” gender advantage, health advantage, professional advantage, and scale advantage.

Fifth, give full play to the traditional mutual assistance and reciprocity type of zero-round distribution mechanism of rural families. Develop and expand the collective (mutual) economy in the vast rural areas and increase the collective common property. The government should provide guarantees in direct transfer payments, basic public services, infrastructure, habitat environment, rural toilet conversion, etc., and give full play to the zero-round distribution mechanism unique to peasant families, such as the two-way mechanism for parents to raise their children and children to support their parents, which is an important basis for achieving common prosperity within rural areas.

7.6 Improve National Public Service System

A sound national public service system is an important pillar for building a society of common prosperity for all people. The Fifth Plenary Session of the 19th CPC Central Committee clearly put forward the strategic goal of equalizing basic public services by 2035. This indicates that China needs to use three more five-year plans to establish a national basic public service system that is compatible with the goal of basically realizing socialist modernization. By 2035, China will basically realize the equalization of basic public services, basically build a national basic public service system with universal coverage, more balanced, higher quality, more convenient, and more sustainable, achieve full population coverage of basic public services, continue to narrow the income gap between regions and urban and rural areas, significantly improve the level of equalization of basic public services, and meet people's multi-level and diverse needs for basic public services.

Establish and improve the national basic public service system and raise the level of equalization of basic public services. Promote the unification of basic public service systems and standards for urban and rural residents, and establish a dynamic adjustment mechanism to continuously improve the quality of basic public services and the level of protection. Basic public services are mainly related to public education, employment and entrepreneurship, social insurance, health care, social services, housing security, public culture, national fitness, welfare and resettlement, services for the disabled, and other areas. Basic public services should be provided universally and precisely, so as to improve the efficiency of public resource investment.

Actively develop non-basic public services to better meet the diverse needs of the general public. First, actively develop quasi-basic public services, including kindergartens, vocational education, and special education at non-compulsory education levels, and vigorously promote socially run medical services, care services for key groups, guaranteed housing, etc., and actively explore various forms of government-social capital cooperation with public welfare objectives, while giving subsidies to participating social capital through fiscal and taxation means. Second, vigorously develop operational public services to meet the diverse needs of residents for social public services through market mechanisms, and also make operational public services an important means of creating employment and solving shortages of social services. This requires innovating multiple forms of non-basic public service supply and supporting the market and grassroots organizations, enterprises and community service organizations, and social parties and beneficiary publics to jointly establish diversified social service institutions or organizations.

Prioritize the protection of the financial expenditure needs of basic public services. Clarify the central and local affairs and expenditure responsibilities in the field of public services, increase the financial support of the central and provincial governments for the provision of basic public services, increase the government's efforts to purchase basic public services, and evaluate the social effects of basic public services supported by public finance, report to the National People's Congress at the same level, and make timely announcements to society.

7.7 Play the Important Role of State Redistribution

National financing is the most important institutional arrangement to play the role of redistribution and an important means to promote the common prosperity of all the people. Finance should not only strongly support high-quality development, make the economic cake bigger and stronger, and serve to create national wealth but also improve secondary income distribution, share the economic cake, and promote the equalization of basic public services through transfer payments, thus promoting the common prosperity of all people. The lack of national financial drawing capacity is the biggest constraint on the country's redistributive capacity. Internationally, most high-income countries have a relatively high proportion of government fiscal revenue to GDP.

Continuously increase the proportion of general public budget revenue and expenditure to GDP. As China enters the stage of high-income level, we can afford to continuously increase the proportion of general public budget revenue and expenditure to GDP, and increase financial transfers to local governments, thus narrowing the regional development gap. The first step is to increase the share of general public budget revenue to GDP from 18.0% in 2020 to more than 22% in the 14th Five-Year Plan period.²⁷ Accordingly, the proportion of general public budget expenditure to GDP will increase from 24.2% to more than 25%. In the second step, by 2035, China's GDP per capita will reach the level of medium-developed countries, and the share of general public budget revenue and expenditure in GDP will strive to reach 28% and 30%, respectively.²⁸ Better play the important role of the state in redistribution. Continuously improve the livelihood orientation of national and local public finance. Spend on the people with what is taken from the people, especially in public expenditure areas such as education, health care, social security and employment, cultural undertakings, resource conservation and environmental protection, and transportation.

Give full play to the redistributive function of the socialist state. This is the institutional arrangement for promoting the common prosperity of all people. Article 6 of the Constitution of the People's Republic of China stipulates that “the distribution system in which distribution according to labor is the mainstay and multiple modes of distribution coexist is upheld.” Improve the personal income tax system, adjust the personal income tax rate at an appropriate time, regulate the order of income distribution, reasonably regulate excessive income, regulate the collection of capital income tax, curb the disorderly expansion of capital, set out a negative list, and resolutely crack down on all kinds of illegal income. Promote real estate tax reform, and gradually move from pilot to universal implementation nationwide. Increase social security and transfer payments to prevent polarization, reduce unfairness in the initial distribution, and fully reflect the superiority of the socialist system. It should be particularly noted that the various and varied tax deductions and exemptions have actually reduced the source of state tax revenue, which not only leads to a continuous decline in the proportion of general public revenue to GDP but also directly affects the redistributive capacity of the state.

Make the state-owned economy stronger, better, and bigger. The Third Plenary Session of the 18th CPC Central Committee emphasized that we must unswervingly consolidate and develop the public sector economy, adhere to the main position of the public sector, play a leading role in the state-owned economy, and continuously enhance the vitality, control, and influence of the state-owned economy. This is an important economic foundation to ensure that all ethnic groups in China share the fruits of development, and an important guarantee to consolidate the Party's ruling position and adhere to China's socialist system, as well as a socialist economic foundation for building a common wealthy society. Article 7 of the Constitution of the People's Republic of China provides: “The state-owned economy, that is, the socialist economy owned by the whole people, is the dominant force in the national economy. The state guarantees the consolidation and development of the state-owned economy.” In terms of the number of registrations, the number of state-owned enterprises in China decreased from 442,000 in 1996 to 133,000 in 2017, and the proportion of the number of national enterprise registrations decreased from 16.8% in 1996 to 0.73% in 2017. On the one hand, although the proportion of state-owned enterprises is decreasing, the overall influence and control are still guaranteed; on the other hand, in order to make the state-owned economy stronger, better, and bigger, it must have “dos” and “don’ts” and seize the key areas related to the national economy and people's livelihood.

Continue to encourage the development and growth of China's private economy (meaning non-state economic components such as the private and individual economy) to make greater contributions to job creation and increased tax revenue. The number of private enterprises nationwide increased from 443,000 in 1996 to 14,369,000 in 2017, an increase of 31.4 times, with an average annual growth rate of 18.0%, and the proportion of the number of all enterprises increased from 16.9% to 79.4%.²⁹ In 2020, the proportion of tax revenue paid by the private economy reached 60.1% of the national tax revenue,³⁰ and with the same tax rate for corporate tax, large and medium-sized private enterprises still have some potential for tax revenue. Encouraging the development and growth of the private economy is also a basic requirement for strengthening and consolidating the foundation of the socialist economy, and is a basic way for all people to move toward common prosperity. At the same time, non-public economic entities should be guided to gradually adjust the mutual relationship between owners, managers, and ordinary workers in production, improve the status of ordinary workers, and actively create harmonious socialist labor relations.

In short, “Now, it has reached the historical stage of solidly promoting common prosperity.” As a world power with a population of more than 1.4 billion people, China is at the current stage of development, and the problem of unbalanced and insufficient development is very prominent, which also highlights the value of common prosperity even more. Therefore, promoting the common prosperity of all people is a great historical task with extremely ambitious goals and far-reaching effects, which requires a long period of time to achieve, and is a protracted struggle of socialist modernization construction. Achieving common prosperity should neither be rushed nor be delayed forever; it should neither be the Great Leap Forward, nor take uniform steps; it should not be egalitarianism, and much less become polarization. The development of China's socialist modernization should be carried out in accordance with the regular characteristics of the development of China's socialism, steady and solid. The state should encourage each region to create different models of common prosperity according to the practical situation, to be shared not only by the local people but also by the whole country. In this sense, the Opinions of the Central Committee of the Communist Party of China and the State Council on Supporting Zhejiang's High-Quality Development and Building a Demonstration Zone of Common Wealth can both explore new paths and accumulate successful experiences for other parts of the country to promote commonwealth, summarize shortcomings, and provide guidance to avoid detours.