China’s Xi urges companies to contribute for common prosperity amid tough situation

BEIJING, March 6 – Chinese President Xi Jinping said on Monday that private companies should be “rich and loving” by taking responsibility alongside state-owned firms to achieve prosperity for all.

China’s Xi urges companies to contribute for common prosperity amid tough economic situation in the country especially among lower middle and poor class.

Private Chinese and foreign firms have been waiting for Beijing to flesh out details on how it intends to pursue “shared prosperity,” Xi’s signature initiative to narrow China’s wealth gap, and how it expects private firms to contribute.

In a closed-door meeting with government advisers representing the business sector during the annual parliament session, Xi urged private firms and entrepreneurs to be “patriotic” and actively participate in charity events, state radio reported Monday.

Si also said that private firms should share the fruits of their growth with employees more fairly, in what he called a “community of shared interests.”

“Be rich and responsible, be rich and benefit others, be rich and loving,” state radio quoted Xi as saying.

Some analysts say private firms fear that Xi’s call for “shared prosperity” could translate into a de facto tax as indebted local governments struggle to raise fiscal revenue.

“The problem with ‘shared prosperity’ is that it can lead to a very uncertain tax burden, unlike the official corporate tax rate as set by law,” Alfred Wu, associate professor at the Lee Kwan Yew School of Public Policy at the National University of Singapore, he told Reuters.

He said it was unfair to expect private firms to share social responsibility for “shared prosperity” with state-owned firms, which have privileged access to markets and preferential loans not always available to private firms.

Xi Jinping said on Monday that China will always treat private firms and entrepreneurs as “family” and vowed to remove institutional barriers that prevent private companies from competing fairly, state radio reported.

Beijing has pledged to support the private sector, which is reeling from a regulatory crackdown on the real estate, technology and private education sectors and is recovering from state-imposed COVID restrictions that were lifted in December.

Xi Jinping has blamed the West for the problems facing China’s economy. “Under the leadership of the United States, the West has implemented comprehensive restrictions to suppress China, which has brought unprecedented challenges to China’s development,” state radio quoted Xi as saying.