China's Xi urges private firms to 'be rich and loving' in pursuit of prosperity for all

He expects private firms and entrepreneurs to shoulder a responsibility along with state-own firms to achieve prosperity for all

Chinese President Xi Jinping attends the opening session of the Chinese People's Political Consultative Conference (CPPCC) at the Great Hall of the People in Beijing, China Mar 4, 2023. REUT

Chinese President Xi Jinping said on Monday that private companies should be "rich and loving" by shouldering a responsibility along with state-own firms to achieve prosperity for all.

Private Chinese and foreign firms have been waiting for Beijing to flesh out details on how it intends to pursue "common prosperity", Xi's signature initiative to narrow China's wealth gap, and how it expects private firms to contribute.

Speaking in a closed-door meeting with government advisers representing the business sector during the annual session of parliament, Xi urged private firms and entrepreneurs to be "patriotic" and participate actively in charity undertakings, state radio reported on Monday.

Xi also said that private firms should share the fruits of their growth with employees more equitably, in what he called a "community of shared interests".

"Be rich and responsible, be rich and benefit others, be rich and loving," state radio cited Xi as saying.

Some analysts say private firms are concerned that Xi's call for "common prosperity" could translate into a de facto tax as debt-ridden local governments struggle to boost fiscal revenue.

"The problem with 'common prosperity' is it can lead to a very uncertain tax burden, unlike the official corporate tax rate as stated by law," Alfred Wu, associate professor at the Lee Kwan Yew School of Public Policy at the National University of Singapore, told Reuters.

He said it is unfair to expect private firms to share the social responsibility for "common prosperity" with state-owned firms, which enjoy privileged access to markets and preferential loans not always available to private firms.

Xi said on Monday that China would always treat private firms and entrepreneurs as "family" and promised to remove institutional obstacles that prevent private companies from being able to compete fairly, according to state radio.

Beijing has pledged to support a private sector reeling from a regulatory crackdown in the property, technology and private education industries and recovering from state-imposed COVID restrictions that were lifted in December.

Xi blamed the West for the difficulties faced by China's economy. "Led by the United States, the West has implemented all-round containment to suppress China, bringing unprecedented challenges to China's development," state radio quoted Xi as saying.