China's Xi calls for progress on property tax in drive for prosperity
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[October 15, 2021] BEIJING
(Reuters) - China's President Xi Jinping warned against government
over-promising on social welfare amid a push to achieve "common
prosperity" by mid-century, while demanding progress on a long-awaited
property tax that could help reduce wealth gaps.
China, still an avowedly socialist country, has vowed to reduce
inequality after years of breakneck growth while stressing that people
should still work hard to create wealth.
In an essay in the ruling Communist Party journal Qiushi, published by
the official Xinhua news agency on Friday, Xi also called for China to
"vigorously and steadily advance" legislation for a property tax.
China has mulled such a tax for over a decade but faced resistance from
stakeholders including local governments themselves, who fear it would
erode property values or trigger a market sell-off.
Such a tax could curb rampant speculation in the housing market, which
is currently under intense global scrutiny as developer China Evergrande
Group (3333.HK) struggles with a debt crisis.
Xi also warned against government over-promising on social welfare amid
a push to achieve what he called "common prosperity" by mid-century.
"Common prosperity" is a broad policy drive to narrow the gap between
rich and poor. It has involved a wave of regulatory crackdowns on
excesses in industries including technology and private tuition.
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Chinese President Xi Jinping speaks at a meeting commemorating the
110th anniversary of Xinhai Revolution at the Great Hall of the
People in Beijing, China October 9, 2021. REUTERS/Carlos Garcia
Rawlins/File Photo
China became an economic powerhouse after reforms unleashed last century under a
hybrid policy of "socialism with Chinese characteristics", but it also deepened
inequality, especially between urban and rural areas, a divide that threatens
social stability.
The gap between people's income and consumption should be narrowed to a
"reasonable range" by mid-century, Xi said.
But Xi also said that the government should not make promises it could not
deliver on and avoid the "trap" of "welfarism" and helping the lazy.
"The government cannot take care of everything," he said.
While the "ossification" of social classes should be prevented, so should "lying
flat", said Xi, referring to a trend among China's youth to embrace passivity
and step back from intense competition in the world's second largest economy.
"Some developed countries...due to their social systems, have not resolved the
problem of common prosperity, and the disparity between the rich and the poor
has become more and more serious," he said.
Xi also said that salaries of grassroots-level civil servants and workers at
state-owned enterprises should be increased.
(Reporting by Gabriel Crossley, Stella Qiu and Yew Lun Tian; editing by John
Stonestreet, William Maclean)
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