Chinese President Xi calls for progress on property tax to promote prosperity

Chinese President Xi Jinping speaks during a meeting commemorating the 110th anniversary of the Xinhai Revolution at the Great Hall of the People in Beijing, China on October 9, 2021. REUTERS / Carlos Garcia Rawlins / File Photo

BEIJING, Oct. 15 (Reuters) – Chinese President Xi Jinping has warned of government over-promises on social welfare amid push to achieve “common prosperity” by mid-century , while demanding progress on a long-awaited property tax that could help narrow the wealth gap.

China, still a blatantly socialist country, pledged to reduce inequality after years of skyrocketing growth while stressing that people should still work hard to create wealth.

In an essay in the ruling Communist Party’s Qiushi newspaper, published by the state-run Xinhua News Agency on Friday, Xi also called on China to “vigorously and steadily advance” land tax legislation.

China has been considering such a tax for more than a decade, but has met resistance from stakeholders, including local governments themselves, who fear it could erode property values ​​or trigger a massive sale in the market.

Such a tax could curb widespread speculation in the housing market, which is currently under scrutiny globally as developer China Evergrande Group (3333.HK) grapples with a housing crisis. debt.

Xi also warned of the government’s excessive welfare promises in an effort to achieve what he called “common prosperity” by the middle of the century.

“Common prosperity” is a broad policy aimed at reducing the gap between the rich and the poor. This has involved a wave of regulatory crackdown on excesses in industries, including tech and private tuition. Read more

China has become an economic power after reforms initiated in the last century as part of a hybrid policy of “socialism with Chinese characteristics”, but it has also widened inequalities, especially between urban and rural areas, a divide that threatens social stability.

The gap between people’s income and consumption is expected to be narrowed to a “reasonable range” by mid-century, Xi said.

But Xi also said the government shouldn’t make promises it can’t keep 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 avoided, it should be “kept flat,” Xi said, referring to a tendency among Chinese youth to embrace passivity and step back from it. intense competition in the world’s second largest economy.

“Some developed countries … because of their social systems, have not solved the problem of common prosperity, and the disparity between rich and poor has become more and more serious,” he said. .

Xi also said that the salaries of grassroots civil servants and workers in state-owned enterprises should be increased.

Reporting by Gabriel Crossley, Stella Qiu and Yew Lun Tian; edited by John Stonestreet, William Maclean

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