China to test income redistribution in Zhejiang province

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China is using the eastern province of Zhejiang to test a series of initiatives to promote “common prosperity” as the country grapples with gaps between urban and rural development, unequal income distribution and a lack of consistency in development.

“The growing need for a better life is the fundamental goal, reform and innovation is the fundamental driving force, and the main direction is to solve the problem of regional gaps, urban-rural gaps, and income gaps,” said a report from the Communist Party of China’s Central Committee and the State Council, which issued guidelines on the reforms to be made.

Some of the reforms that China is looking to make include adjusting the minimum wage standard, creating incentives for people to give back to their society, strengthening enforcement around anti-monopoly and anti-unfair competition laws and amending “excessively high” incomes. The report did not include any specifics on how Zhejiang would achieve these goals. 

The report said that by 2035, “the per capita GDP and the income of urban and rural residents strive to reach the level of developed economies, the coordinated development of urban and rural areas will be higher, the income and wealth distribution pattern will be more optimized, the construction of the rule of law in Zhejiang and the safe Zhejiang will reach a higher level, and the governance system and governance capacity will be modernized.”

In 2019, China received a score of .465 on the Gini index, which measures income inequality and ranges from 0, which notes perfect income equality, to 1, which notes complete income inequality. A score of .4 or higher is considered at a “warning level.”


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