(East-West Question) Wang Xiaolu: What "misunderstandings" should be avoided in understanding "common prosperity"?

  China News Agency, Beijing, April 18th, Question: Wang Xiaolu: What "misunderstandings" should be avoided in understanding "common prosperity"?

  China News Agency reporter Xia Bin

  In 2021, China will build a moderately prosperous society in an all-round way as scheduled, and start a new journey of building a modern socialist country, thus putting the promotion of common prosperity of all people in a more important position.

However, there are some cognitive biases in how to accurately understand "common prosperity".

  Will common prosperity return to the era of "big pot rice"?

Common prosperity to "rob the rich to help the poor"?

There are more voices overseas linking it with platform enterprise supervision and anti-monopoly measures, saying that "common prosperity" will affect the development interests of Chinese private enterprises.

At present, it is urgent to justify the name of "common prosperity".

  Wang Xiaolu, deputy director of the National Economic Research Institute, recently said in an exclusive interview with China News Agency's "East and West Questions" that "common prosperity" is not an equal distribution, it must be based on a market economy. , so that everyone can benefit from economic development.

The following is a summary of the interview transcript:

China News Agency reporter: How should we correctly understand "common prosperity"?

What misunderstandings need to be corrected?

Wang Xiaolu:

One of the more prominent problems is that some people oppose common prosperity and market economy, and think that common prosperity is "equalizing the rich and the poor", which is wrong.

  Common prosperity is not common poverty, and it is not a return to the era of “big pot rice”.

  How can I make a big cake?

Economic development must be efficient, and market economy can improve efficiency.

Before the reform and opening up, we implemented a planned economy and unified distribution across the country. Everyone who contributed more or less received similar returns. There was no enthusiasm and economic production was inefficient.

  Today's common prosperity is not equal distribution, it must be based on a market economy, and then a more complete system should be formed so that everyone can benefit from economic development.

  It is necessary to acknowledge the existence of the income gap. Everyone contributes differently. Part-time workers get wages, investments have capital returns, inventions and creations can also get corresponding income, and income gaps naturally arise. This is the initial distribution according to market conditions. .

  "Common" is not "average", not everyone is the same.

We must protect vulnerable groups and people in need, even if they contribute relatively little or no contribution, such as the incapacitated elderly, the sick, the disabled and the unemployed, they should all receive basic living guarantees, and as the economy develops, their Life should also be improved.

This requires institutions and governance, including income transfers, redistribution, social protection and public services.

  When people can be covered by the social security system, have basic guarantees for life, and can enjoy basic public services, so that everyone can benefit from development, and the income gap is kept within a reasonable range and cannot be expanded indefinitely, I think this It is "common prosperity".

In Hongzhuang Town, Donghai County, Lianyungang City, Jiangsu Province, female migrant workers produce clothing for export to Middle Eastern countries.

Photo by Zhang Zhengyou issued by China News Agency

China News Service reporter: What systems does China need to promote the realization of "common prosperity"?

Wang Xiaolu:

A social security system has been established, but this system is not fully covered. There are more than 200 million migrant workers in cities and towns. They are no longer farmers. They have lived and worked in cities for a long time and are engaged in non-agricultural industries. Covered by the urban social security system, they cannot be excluded from the security system because of the restriction of household registration.

  When the epidemic was severe in 2020, many people lost their jobs, but only a few people actually received unemployment insurance benefits, those with urban household registration. Those migrant workers who do not have urban household registration, even if some of them have joined unemployment insurance, but Due to the many complicated system regulations for receiving unemployment insurance benefits, it is still difficult for most people to receive insurance benefits.

Only after some special relaxation policies have been adopted, some people have received a certain degree of relief.

  They also work in the city and make the same contribution, but the system only provides benefits to some people, while others do not. This is the flaw of the system and needs to be further improved.

For example, if you have worked in the city for three or five years, you should be naturally accepted as an urban resident and enjoy the same social security benefits.

If we can do this, we will be one step closer to common prosperity.

There are also urban-rural differences and regional differences in public services, and efforts should be made to gradually reduce them.

The supply of affordable housing should also be greatly strengthened so that everyone can have a house to live in.

In Taiyuan, Shanxi, residents of the shantytown reformed area hang out their clothes in the community after living in the affordable housing in Xihuayuan.

Photo by China News Agency reporter Wei Liang

China News Service reporter: What does "common prosperity" mean to China's wealthy groups and large enterprises?

Wang Xiaolu:

For them, this should not mean any fundamental change.

Rewarding income through the market, as long as it is legal to get rich, it is deserved.

  If entrepreneurs are caring, pay special attention to low-income groups and vulnerable groups, and are willing to help them, this is very worthy of encouragement and promotion, but it does not mean that they have to undertake certain obligations, and they cannot do charity because of certain political pressure and social pressure. .

Entrepreneurs make their enterprises bigger and bigger is their contribution to society, providing a lot of employment, paying a lot of taxes, and creating GDP.

"Common prosperity" does not mean changing the principle of market distribution, and legal income obtained through market channels must be protected by law.

  However, our tax system needs to be improved, and some people's interests may be affected, but these effects are "plus or minus" and should not simply be tax increases.

The general direction should be that relative to the income, the tax burden should be reduced, and the tax burden may be increased a little more for those with high income but light tax burden, so that everyone's tax burden is more balanced and more compatible with income.

Pay more tax on more income, but not a punitive tax rate for people with high incomes.

Enterprise employees handle relevant business at the tax window of the Administrative Service Center of Dongqiao Economic and Technological Development Zone, Ningde, Fujian.

Photo by China News Agency reporter Zhang Bin

China News Service: Compared with the high welfare system in the West, how should China achieve "common prosperity"?

Wang Xiaolu:

According to the data of the National Bureau of Statistics, China's Gini coefficient in 2020 is 0.468, and the calculation results of some research institutions are higher.

In developed countries, except for the United States, where the income gap is relatively large, the Gini coefficient is about 0.40, and most Western European and Northern European countries are even lower. Western European countries are roughly between 0.30 and 0.36, and Nordic countries and Japan are roughly between 0.25 and 0.30. between.

  Of course, the national conditions of each country are different, and the system should be optimized based on the actual situation in the local area. Learning from foreign experience should also be "sinicized", taking the essence and discarding the dross. The goal is to use a more reasonable and perfect distribution system. "Do better.

  It cannot be said that because China is a socialist country, it is necessary to carry out equal distribution and return to the planned economy, and the government shall replace the market and the government shall carry out the distribution.

Because past practice has proved that this road does not work.

If you want to "take the old road", the cake will not be bigger, and "common prosperity" will become "common poverty".

We need to make the distribution system more perfect on the basis of ensuring efficiency and without changing the basic principles of the market economy, so that everyone can enjoy better welfare benefits.

In Handan City, Hebei Province, volunteers measure blood pressure for free for residents of Chunguangyuan Community.

Photo by Hao Qunying issued by China News Agency

China News Service: Do some western developed countries also have their own versions of "common prosperity"?

Wang Xiaolu:

The social welfare and security systems in developed countries have their own characteristics, but they also have something in common. As the common crystallization of human civilization, this does not respect national borders and can be shared, which should not be excluded.

Generally speaking, the market economy, income redistribution system, social welfare and security system are all like this.

The entire so-called Western world or developed countries are market economies, but market economies do not only belong to the Western world, and their market economy today has changed a lot from the 19th century.

  Western countries in the 19th century were largely a completely laissez-faire market.

In the 20th century, capitalist countries established a system of income redistribution and public services and social security systems.

This change is also produced by dialogue, games and struggles among all social strata.

  Like the United States, during the Great Depression in the 1930s, Roosevelt implemented the New Deal. The government used money to help the unemployed. It was first a temporary measure, and then it became a normalization. It gradually established an unemployment insurance system and other social security. system.

  Today's western developed countries have evolved into a mixed economy in which capitalism and socialism coexist, but this socialism refers to the sharing of development achievements by the whole people, not a planned economy where the government decides everything, nor an egalitarian distribution system.

China News Service reporter: The high welfare system in Western countries has been implemented for many years. How can we avoid detours in the process of learning from it?

Wang Xiaolu:

I think there are two points to pay attention to.

The first is the universal nature of the welfare system. It must be shared by the whole people, and some people cannot be excluded.

This point, some developed countries have done better, we need to improve.

  The second is to avoid excessive welfare affecting development.

For example, in the past few years, the high welfare system of Greece, Portugal, Spain and other countries has become an important reason for the debt crisis.

Because the level of national economic development cannot support such a high level of welfare, it can only be "suffering the grain", and maintaining a high welfare system by borrowing money will eventually turn into a debt crisis.

  We need to have a public welfare system, but it must be adapted to the level of development, and the economy and society cannot be overburdened.

At the same time, it should be noted that the scale of government investment cannot exceed the permission of economic conditions. Excessive investment will also cause heavier debt burdens and lead to debt crisis.

  The money for public expenditure should be spent on the cutting edge. On the one hand, we should first deliver help in a timely manner to solve the most urgent problems of the people, and then consider the icing on the cake. The government and handling agencies spend money indiscriminately to prevent the waste, loss, and corruption of public resources. By improving the system, the same amount of funds can bring better welfare protection.

(Finish)

Interviewee Profile:

  Wang Xiaolu, Ph.D. in economics, deputy director and researcher of the National Economic Research Institute, and executive director of the China Economic System Reform Research Association.

Since 1978, he has been engaged in economic development and reform research for a long time, and his research fields include China's economic system reform, economic growth, income distribution, urban and rural development, etc.

He has published more than 100 academic papers in both Chinese and English, and 20 academic works and research reports.

He has won the 1st and 11th Sun Yefang Economic Science Paper Award, the 1st China Soft Science Award, the National Library Wenjin Book Award, and the Australian National University Outstanding Doctoral Thesis Award. Person of the Year who has a major influence on affairs.

Published works include "The Road to Reform - Our Forty Years", "Marketization Index Report by Provinces in China", "Market Economy and Common Prosperity", etc.