Promoting common prosperity through improving ownership relations in China

Abstract

The reason why the income gap among the Chinese people is continuously increasing is primarily that the proportion of private ownership in China's ownership relations is increasing while that of public ownership is decreasing. Efforts to find solutions to the problem of a growing income gap in the domain of distribution relations have not been entirely effective, and have made little practical contribution to resolving the problem, while being unsustainable as well. Only the improvement of ownership relations can fundamentally reverse the trend to an increasing income gap within the Chinese population, and promote common prosperity. This paper suggests a scientific approach: in respect of the ownership structure, the proportion of public ownership in the national economy should be increased, and a pattern established in which the public economy holds the dominant position, while the various elements of the multi-ownership economy, directed by the state-owned economy, coordinate with each other for development. Within the public economy, we need to improve the manner in which ownership of the means of production by workers is realized, and actively apply the principle of distribution according to work in the enterprises. In the private economy and foreign-funded enterprises, we should supervise the capital–labor relationship, restrict exploitation of workers by capital, and in accordance with legislation, protect the economic rights of workers.

Keywords:

• income gap among the population
• distribution relations
• ownership relations

Notes

¹In our view the term ‘effective market system’ here should be understood as referring to the modern capitalist market economic system.

²This figure was calculated as follows: (national public finance expenditure of 8987.416 billion RMB yuan+ supplementary central budget stabilizing and adjusting fund of 225.765 billion RMB yuan+carry-over of local public finance for the following year's expenditure of 106.970 billion RMB yuan) − (national public finance revenue of 8310.151 billion RMB yuan+input central budget stabilizing and adjusting fund of 10 billion RMB yuan). See Ministry of Finance of the People's Republic of China (2011a, 2011b).

³See Article 8 of the General Principle of the Constitution of the People's Republic of China (2004 Amendment), and Gazette of the Standing Committee of the National People's Congress of the People's Republic of China (2004 special issue).