The Strategist

China sets to combat excessive profits

08/19/2021 - 12:35

China has announced the need to fight "excessive income", Chinese President Xi Jinping said during a meeting on financial and economic affairs.

Jamie Davies via flickr
Jamie Davies via flickr
He called on citizens and companies with high incomes to "give more to society" so that "universal prosperity" can be achieved, as socialism demands. 

"Universal prosperity is the prosperity of all people. It is the material and spiritual life of the people. It is not the prosperity of a few individual citizens or universal equalisation," said the Chinese leader, who attended government meetings for the first time since late July. 

The theme of "shared prosperity" has recently been echoed by the Chinese authorities amid stricter regulation of high-tech companies. The new measures have caused significant falls in the stocks of Chinese companies listed abroad, and the combined wealth of China's leading high-tech businessmen has shrunk by $87 billion since late June, according to Financial Times and Bloomberg calculations. 

Meanwhile, China's State Administration of Market Regulation is already preparing a new draft of antitrust regulations for the technology sector that would further tighten requirements for IT companies.