(Economic Observation) On the road to common prosperity, how can China make the cake bigger and share the cake well?

  China News Service, Beijing, November 29 (Reporter Xia Bin) The "Resolution of the Central Committee of the Communist Party of China on the Party’s Major Achievements and Historical Experience in a Century of Struggle" recently announced that "the common prosperity of all people is basically achieved" has been designated as China's mid-century. One of the goals of building a powerful modern socialist country.

At the "Caijing" Annual Conference 2022 held recently, many participants offered their suggestions and suggestions to explore specific paths to achieve common prosperity.

  "The policy orientation in the future should be to allow all sources of wealth creation to fully flow, so that all people who'make cakes' can safely'make cakes' in the country, so that there will be a material basis for common prosperity. This is the realization of common prosperity. The most important point is to make the cake big enough.” said Huang Mengfu, former vice chairman of the National Committee of the Chinese People's Political Consultative Conference and former chairman of the All-China Federation of Industry and Commerce.

  Cai Fang, former vice president of the Chinese Academy of Social Sciences and member of the Monetary Policy Committee of the Central Bank, said bluntly that common prosperity means sharing the fruits of development. The premise is to make a big cake.

  How to make a big cake?

In Huang Mengfu's view, making the cake bigger depends on the three basic forces of state-owned economy, private economy, and foreign-funded economy. Now the three forces account for about 20%, 65%, and 10% of GDP respectively. In the future, this proportion pattern may appear. Changes, but the state-owned economy is still the vanguard and leading force, the private economy is the basic force, and the foreign-funded economy is a useful supplement.

  How to divide the cake?

In Cai Fang's view, the nature of the first distribution, the redistribution, and the third distribution are not exactly the same, and the focus is not exactly the same. They have their own positioning and are therefore complementary.

One of the key points of the reform dividend in the three distribution areas is to combine the improvement of people's livelihood and productivity with the promotion of social mobility.

  He further stated that the primary distribution is the most basic, because the primary distribution is the allocation of production factors and resource factors, determines how much the various production factors get paid, and creates incentives and efficiency.

The redistribution of national income and the provision of social welfare are important ways for the government to function. This is a necessary way to share productivity and the ultimate means of common prosperity.

  Huang Mengfu pointed out that if the cake is to be distributed more evenly, the government should reduce expenditures, streamline its troops and streamline its administration. In addition, when companies make profit distributions, they should give more preference to employees, including training employees, improving their skills, and improving their working environment. .

  In addition to making the cake bigger and dividing the cake well, Cai Fang also pointed out that increasing investment in education and increasing the total amount of human capital are crucial to narrowing the income gap and achieving common prosperity.

China has achieved rapid development of education by popularizing nine-year compulsory education and expanding college enrollment. This is also an important reason for the rapid growth of the domestic economy in the past few decades.

  Emphasizing low-income groups is also closely related to achieving common prosperity.

"To maintain financial stability and promote stable economic growth, we must better safeguard the interests of low-income groups." Wang Xin, director of the Research Bureau of the People's Bank of China, said that low-income groups tend to have weak risk awareness and weak tolerance for financial risks.

  How to protect the interests of low-income groups?

Wang Xin gave specific measures in four areas. One is to improve the deposit insurance mechanism and take multiple measures to prevent and resolve the risks of problematic financial institutions. The second is to promote the sound development of the real estate financial market. The third is to strengthen and improve the financial supervision of platform enterprises. Explore and improve the macro-prudential management of cross-border capital flows, and continuously enhance the flexibility of the RMB exchange rate.

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