What ‘Common Prosperity’ Means and Why Xi Wants It

Chinese President Xi Jinping is on a campaign to remake the world’s second-biggest economy with an emphasis on “common prosperity.” The hope is that a mix of policy moves, market forces and philanthropy will address the country’s wide and persistent wealth gap, which could become a political threat to the ruling Communist Party if left unchecked. Regulators have targeted some of China’s most successful private enterprises, the data-rich tech sector in particular, alarming investors. They’re also trying to rein in what the government sees as the excesses of civil society, including rabid celebrity fandom, academic cram schools and video gaming.

China’s richest 20% earn more than 10 times the poorest 20%, a wider gap than in the U.S. or European countries such as Germany and France, and one that hasn’t budged since 2015. Though the number of people living in extreme poverty has dropped dramatically over the past decade, more than 600 million people -- about half of China’s population -- live on an annual income of 12,000 yuan ($1,858) or less. At the other end of the spectrum, rapid economic growth and market-based reforms created tremendous wealth: China has 81 billionaires on Bloomberg’s ranking of the world’s 500 richest people, more than any other country after the U.S., and there are thousands more billionaires and multimillionaires who don’t crack the top 500.