Global shift towards greater equality shows China’s ‘common prosperity’ goals are not unique

The breadth of Beijing’s reforms have received much attention, but policy proposals elsewhere show it is far from alone in seeking to put people before profit

Aiming for a more equal society is a just cause, but governments also have to strike a balance between improving equality and achieving growth

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A clock displays the time in front of posters of German Chancellor Angela Merkel and Armin Laschet in Berlin on September 27. German voters called time on Merkel’s centre-right Christian Democratic Union last month, part of a global leftward shift amid an uneven recovery from the pandemic. Photo: DPA

Tai Hui

Tai Hui is chief market strategist for the Asia-Pacific at JP Morgan Asset Management.

Published: 2:30pm, 15 Oct 2021

Which government is working to reduce income inequality, raise wages, improve welfare for workers, get companies and financial investors to pay their fair share of taxes and improve the environment? China? The United States? Japan? Britain? Germany?

The answer is all of the above. Among these, though, China has been in spotlight this year with a flurry of regulatory changes aimed at achieving “common prosperity”. These include improving income equality, controlling home prices for better affordability and creating a level playing field for small and medium-sized enterprises.

Companies are expected to provide adequate social welfare coverage for their employees and eliminate excessively long working hours. Industry leaders have been penalised for abusing their dominance to suppress competition. Internet companies are being required to improve cybersecurity and protection of customers’ personal data.

However, implementation of these well-intended policies has been seen as abrupt, and has shocked businesses and investors. The breadth of the reforms has also led investors to wonder whether other sectors could come under regulatory scrutiny. If education and housing are considered to be social goods, what about health care, for example?