Why has a ‘vague’, brief mention of a new ‘common prosperity’ push got on the nerves of China’s rich?
- Xi Jinping outlined how China will keep ‘income distribution and the means of accumulating wealth well-regulated’ at the 20th party congress
- So-called common prosperity was first mentioned by Xi last year amid a drive to close the country’s yawning wealth gap
“The more vague it is, the more afraid everyone is.” A renewed push to regulate wealth accumulation has triggered fresh worries among wealthy and upper middle-class families in China.
Xi outlined how a personal income tax system will be improved, while highlighting how China will keep “income distribution and the means of accumulating wealth well-regulated”.
“We will protect lawful income, adjust excessive income, and prohibit illicit income,” said Xi.
It is seen as targeting the wealthy class, though so far we don’t know the specific agenda and intensity of the implementation of the action plans onwards
Officials have previously denied the strategy is a Robin Hood-style steal from the rich to give to the poor plan, but concerns over investment and asset security remain.
“It is seen as targeting the wealthy class, though so far we don’t know the specific agenda and intensity of the implementation of the action plans onwards, however, the more vague it is, the more afraid everyone is,” said Echo Liang, a Guangdong-based emigration agent and overseas wealth manager.
“In addition, high-net-worth clients now have to realise that they will only have fewer means and less room for portfolio investment globally, which have previously aimed at reducing their risks of over-reliance on China’s policies and markets.”