Many Chinese giants spend their money on charities and take care of themselves instead of reinvesting it, fearing the repercussions of the “shared prosperity” goal.
Jacky Vuong, a 47-year-old businessman, this year bought two Mercedes-Benz cars and donated 3 million yuan ($470,000) to charity work, responding to a call from the local government of Jiangsu province, East China.
Jacky’s cement company is currently operating in moderate numbers, but he decided to do more shopping and charity than investing money to grow the business.
“The company’s business prospects are likely to improve this year, as China wants to boost its economy by investing in infrastructure,” Jacky said. “I should have increased my investment in my factory and worked hard, but I just wanted to ‘be quiet’.”
“Stay still” is a phrase that was mentioned with high frequency on Chinese social media last year, indicating a minimum work style to maintain a life, not “sell a life” for work.
“If it weren’t for the hundreds of workers who depend on work to support their families, I would have closed the factory and enjoyed my life,” Jacky said, adding that he was struggling to adapt. decades, from stricter requirements on environmental protection to “shared prosperity” goals, which focus on reducing the gap between rich and poor, as set by the Chinese government recently.
“The policy makes sense and I fully support it. However, I feel disturbed, depressed, and sometimes afraid,” said Jacky. “It’s hard to focus on business, when the business environment is getting tougher. I can’t help but wonder if China still needs capitalists?”
A corner of Shanghai, China. Photo: AFP.
August 2021, Chinese President Xi Jinping declared “commonwealth” as the main focus, with the aim that all citizens have the opportunity to become rich. Following Xi’s announcement, China issued a series of regulations targeting private businesses, tycoons and even celebrities.
Heavy penalties have been imposed on celebrity tax evasion and allegations of abuse of monopoly position targeted at the internet giant in China, causing chaos in the private sector. . Based on SCMPmore than a trillion dollars in market value of Chinese company shares have “evaporated”.
In November 2021, Chinese Vice Premier Liu He insisted that “shared prosperity” was not “taken from the rich to give to the poor”. Xi also shared this view, asserting in a speech at the Davos Economic Forum earlier this year that “shared prosperity” was not geared towards egalitarianism.
On March 16, two weeks after the massive stock sell-off in China, Liu He promised that future regulations would be transparent and predictable, and said that “super large regulatory companies will be resolved as soon as possible”.
But the concern is still there. Entrepreneurs are still trying to figure out if they still have a place in China’s economic development under the “commonwealth” goal.
Since the late 1970s, China has adjusted its policies, helping private companies thrive, making the country the world’s second-largest economy. The political position of businessmen has also improved. China now has more “super rich” people than any other country.
At the same time, the gap between rich and poor in China is widening, about the same as the US. According to government statistics, the Gini coefficient, a measure of income inequality, in China was 0.47 in 2020, just lower than the 0.48 figure in the US and much higher than Japan, Korea and much of Europe.
The Gini coefficient ranges from 0 to 1, the higher the number, the greater the income inequality. The level of 0.4 is often considered the inequality threshold.
Against this backdrop, Xi pledged in 2021 to narrow the gap between rich and poor, which could hinder the country’s progress and erode public confidence in the Chinese Communist Party’s leadership. He begged the richgiving more back to society”, while insisting on bringing farmers and working families into the middle class.
Bang Bang, executive chairman of the Guangdong Reform Association, a Chinese government think tank, said private businesses can show support for “co-prosperity” by donating, securing tax payments, employing the elderly or disabled, and launching rural revitalization initiatives that contribute to poverty alleviation. .
“At the same time, policymakers need to seize every opportunity to clarify that ‘shared prosperity’ does not cripple the rich, to stabilize private business confidence,” said expert Bang. “If employers choose to ‘lay in peace’, it will be a disaster for the country.”
Duc Trung (Based on SCMP)
at Blogtuan.info – Source: vnexpress.net – Read the original article here
