Almost every economic structure in the world today takes a mixed approach. That means a balance of capitalism and socialism is incorporated into our daily decisions.
The United States leans more toward the capitalism side of the equation. Although wealth redistribution isn’t a formal policy, communities charge taxes for things like public schools and infrastructure that everyone uses.
In China, the pendulum swings more to the socialism side of a mixed economy. That’s because communism is the primary emphasis in most areas, although some special districts have different rules that get followed.
President Xi Jinping put the country on notice in 2021 that wealth redistribution for common prosperity was on the table. It seems that effort is getting a new push today.
The Ruling Party Wants to Eliminate Poverty
China has often led the world in economic growth because of its emphasis on socialism in its mixed economy. That’s because most workers don’t earn competitive wages compared to the rest of the industrialized world.
In 2021, the wealthiest 20% of Chinese citizens earned more than ten times the poorest 20%. That figure hasn’t moved since 2015.
The ruling party wants to reduce poverty in China’s most rural areas. Although some programs have helped achieve that goal, Jinping wants the wealthy to do more. By cracking down on the technology industry and reducing the emphasis on celebrity culture, several billionaires are on notice that the government wants what is in their accounts.
Although no idea is off the table, the two primary efforts to create wealth redistribution are through property and inheritance taxes. In a nation already stressed by COVID concerns, these economics stresses must seem insurmountable. You can track this redistribution effort through your favorite news sites.