Focus topics

‘Common Prosperity’ – the search for the middle way to prosperity

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The concept of “Common Prosperity” is intended to provide answers to one of the fundamental questions China is facing: How will China balance growing prosperity and the massive inequality of this prosperity in the future. So far, the picture is as follows:

  • “Common prosperity” means reducing China’s massive inequality in income distribution while staying course for growing prosperity
  • China’s leadership is distancing itself from the US model of high economic growth at the expense of equal distribution, and thus also from its own motto that “some should get rich first”.
  • At the same time, China does not currently seem to be committed to becoming a welfare state with far-reaching redistribution, as for example the model of Northern European economies
  • China’s instruments for achieving a balanced middle course towards prosperity: progressive taxation, expansion of its social security system, reduction of education costs, workers’ rights and minimum wage, stricter measure against monopoly formation, philanthropy
  • Potential consequences for companies operating in China: increased purchasing power of the Chinese middle class and growing proportion of skilled workers; increased wage costs and rising expectations of companies to contribute to social justice

Sinolytics is a European consulting and analysis company that focuses entirely on China. Sinolytics advises European companies on strategic orientation and specific business activities in China.


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