- China is encouraging the rich to do more to help the poor.
- But Han Wenxiu warned that the state will not support “retail investors.”
- When the policy was introduced, it was cracking down on large companies.
A ruling Communist Party official said on Thursday that China promotes “common prosperity” because President Xi Jinping’s aim to reduce inequality in the world’s second largest economy does not mean “killing the rich and helping the poor.”
Han Wenxiu, an official of the Central Finance and Economics Commission, said at a briefing in Beijing that China must also “prevent falling into the trap of welfarism.”
Read | Understanding China’s regulatory crackdown
He said that those who “get rich first” should help the backward, but should encourage hard work.
“We cannot wait for help, cannot rely on others for help, and cannot beg for help. We cannot support laymen.”
According to a meeting chaired by President Xi earlier this month, China said it would protect legal income, but “rationally adjust” excessive income.
It also encourages high-income groups and enterprises to make more contributions to society.
Han said that charitable donations should be motivated by taxation policies, and the “distribution structure” can be improved. He added that the donation is “not mandatory.”
The policy change comes at a time when the review and supervision of large enterprises, especially large Chinese technology companies, is intensified.
Investors believe that China is undergoing major changes as the government actively implements reforms aimed at reducing pressure on the cost of living at the expense of corporate interests.
Han emphasized that the recent policy of rectifying and regulating Internet platforms is aimed at violations and illegal activities, and is “absolutely” not aimed at private companies or foreign companies.
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