Spreading China’s Wealth

The logo of Alibaba Group at its office in Beijing on Jan. 5, 2021. (Thomas Peter/Reuters)

Commentary

People in China, especially rich ones, are about to learn a new history and an element of communism the older generations had forgotten and the younger ones never knew.

Over the past 40 years or so, it has been widely reported that former Chinese leader Deng Xiaoping sparked the rapid growth of China’s economy by announcing to the nation that “to get rich is glorious.” This came as a huge surprise and even shock to a nation whose wealthy people and even so-called “well off peasants” had been driven out, hounded, killed, and impoverished in the name of communist equality. Indeed, it was more than a surprise. It was relief and hope.

Getting Rich

The Chinese Communist Party (CCP) had promised a better life for all, but it had delivered only famine, torture, self-criticism, and the dunce caps and destruction of the Great Cultural Revolution. Even the schools and universities have been closed.

By suggesting that getting rich was not necessarily a bad thing, Deng launched a true “peoples’ revolution.”

The response was the miracle of Chinese economic, academic, and scientific growth that has astounded the world for the past 35 years or so. In that time, China has become the world’s second largest economy and, by some measures, the largest. It has also been the most dynamic with a vigorous private sector that has pioneered new technologies, new types of business organization, and that has expanded dramatically into international investment and markets. Its technology companies are sometimes world leaders and are all working at the cutting edges of global technology.

First but Not Glorious

In fact, however, Deng never actually said that “to get rich is glorious.” Rather, he said: “let a few get rich first.” He explained in further detail exactly what he had said and meant in an interview with CBS reporter Mike Wallace on Sept. 2, 1986. He emphasized that there can be no communism or socialism with pauperism. So “getting rich is no sin, but what we mean by getting rich is different from what you (in the free world) mean. Wealth in a socialist society belongs to the people. To get rich means prosperity for the entire people. We permit some people to become prosperous first in order to speed the achievement of prosperity for the entire society.”

Chinese leader Deng Xiaoping (L) meeting the then British Prime Minister Margaret Thatcher in Beijing on Dec. 19, 1984. (Pierre-Antoine Donnet/AFP/Getty Images)

Of course, Deng did not live to see more than the enrichment of the first few, and his two immediate successors, Jiang Zemin and Hu Jintao, continued to emphasize the importance of a few getting rich first. Indeed, under their leadership, the race to become a billionaire became the country’s main sport and doing so by corrupt means was not frowned upon. Free World business leaders sometimes spoke of the Chinese business environment as the “Wild West” of capitalism, referring to the sometimes corrupt economic development of the United States.

However, as a student of the history of the CCP, Xi Jinping does know exactly what Deng said and meant, and is now reminding the CCP and the Chinese business community and foreign business leaders who have invested in China that the CCP has eliminated poverty and that it is now time for all the people to share the society’s wealth. In the Christian bible, there is a passage saying: “So the first shall be last and the last first.” This now seems to be what Xi has in mind for China.

The consequences for China’s top business leaders and richest people have already been dramatic. Previously high-flying Alibaba and its founder Jack Ma have been brought low. Indeed, no one seems to have seen Ma for quite some time. Major share offerings and proposed mergers and acquisitions have been halted, resulting in huge financial losses for some of China’s wealthiest businesspeople. If this new policy represents the next socialist step of sharing the country’s wealth equally, this will immediately raise new questions about the ability of China to continue to generate wealth while sharing it more according to need than to creation.

Inevitably, the role of the state in guiding and controlling the economy will become greater while that of private entrepreneurs and business leaders will diminish. A major question has loomed over the Chinese economic miracle for many years: “Will China be able to get rich before it gets old?” Present trends strongly suggest that the answer is “no.” The reason is simply that China’s labor force is already shrinking and aging and this will accelerate rapidly over the next 20 years. If markets are now to be curbed and more attention given to dividing up the wealth than to its creation, it is a certainty that China will not become rich before becoming old.

A final interesting question is that of the future of the state-owned enterprises. They constitute about a third of the economy. Effectively they are owned by the CCP, which completely controls the state and determines the investments and allocations of earnings of the enterprises. Will the CCP share its wealth as equally as the private sector will be guided to do?

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.