Chinese President Xi Jinping awaits U.S. Secretary of State John Kerry, U.S. Treasury Secretary Jack Lew, and members of their delegation as they arrive on June 7, 2016, at the Great Hall of the People in Beijing, China, to attend a bilateral meeting following a two-day Strategic and Economic Dialogue between U.S. and Chinese officials. [State Department photo/ Public Domain]
President Xi Jinping has called for stronger “regulation of high incomes” in the latest sign that a 10-month campaign targeting China’s largest technology companies is rapidly expanding to encompass broader social goals.
State media reported that a meeting of the Chinese Communist party’s Central Financial and Economic Affairs Commission on Tuesday, chaired by Xi, had emphasised the need to “regulate excessively high incomes and encourage high-income groups and enterprises to return more to society”.
The committee added that while the party had allowed some people and regions to “get rich first” in the early decades of China’s reform and opening period, it was now prioritising “common prosperity for all”.
China’s richest entrepreneurs have been under increasing pressure since November, when the planned $37bn initial public offering of Jack Ma’s Ant Group, which would have been the largest ever, was cancelled after the internet tycoon criticised the country’s financial regulators.
More recently, ride-hailing company Didi Chuxing was chastised by officials after it ignored their warnings to postpone a $4.4bn listing in the US. Strict new regulations targeting China’s booming tutoring industry, which Xi has repeatedly criticised, also sparked a sharp sell-off in New York-listed Chinese companies.
The financial and economic affairs committee, which usually focuses on macroeconomic and financial policies, alluded to the education crackdown, saying that China must create “more inclusive and fair conditions for people to improve their education levels”.
It was the first meeting publicly chaired by Xi since late July. Party leaders traditionally retreat to the seaside resort of Beidaihe in early August for policy deliberations, although there has been no official confirmation of the annual retreat in recent weeks.
“Stagnant consumption data has made clear that it’s urgent to increase people’s incomes and focus more on distribution fairness,” said Wang Jun at the China Center for International Economic Exchanges, a Beijing think-tank.
One Chinese entrepreneur said the renewed emphasis on inequality and other social problems, coupled with the recent crackdowns on Didi and education companies, had sent a clear signal to the private sector.
“It sends a very strong message to every company,” said the entrepreneur, who asked not to be identified. “The party wants to have a stronger say in your business and they want you to be more obedient.”
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