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Friday, December 20, 2024

China’s New Era Mechanism for Common Prosperity

 

President Deng Xiaoping opening the Common Prosperity plan of China

President Anura Kumara Dissanayake to visit China in January:

China’s New Era Mechanism for Common Prosperity

Signaling a balanced approach to managing ties with both Asian giants, Sri Lankan President Anura Kumara Dissanayake is set to visit China in January 2025, within weeks after his official visit to India in the third week of December 2024.

China being Sri Lanka’s reliable economic partner, the visit reflects his strategy to strengthen bilateral relations and seek support for Sri Lanka’s economic recovery. Dissanayake’s aim to secure foreign investment, technology, and tourism support while addressing Sri Lanka’s debt challenges. China, a significant investor in Sri Lanka’s infrastructure, has expressed its willingness to deepen cooperation under Dissanayake’s leadership. Analysts suggest that the President’s leftist ideology aligns with fostering closer ties with China, but his pragmatic stance seeks to maintain a balance with India’s strategic interests in the region.

Dissanayake’s diplomatic approach is seen as crucial to navigating the economic and geopolitical pressures facing Sri Lanka. The outcomes of these engagements with India and China will shape the country’s recovery path and its role in regional dynamics.

China’s push for “common prosperity” under the leadership of President Xi Jinping reflects the nation’s resolve to address income inequality, foster equitable growth, and modernise its economic model. As part of this vision, the government has introduced a range of policies, mechanisms, and reforms to promote wealth redistribution, social equity, and sustainable development. This policy shift represents a key element of China’s “New Era” strategy, aiming to balance rapid economic growth with inclusivity and fairness. This is an area Sri Lanka could get huge benefits from the Chinese experience.

Sugeeswara Senadhira Daily News December 20, 2024》

Economic reforms

Common prosperity is not a new concept in China; it was first articulated by Deng Xiaoping during the era of economic reforms in the late 1970s. Deng’s vision emphasised that “some people and regions can get rich first” to spur overall development. However, after decades of rapid growth, income disparities between rural and urban areas, as well as between regions and social classes, have become a pressing issue. Xi Jinping has revived and redefined this goal, focusing on reducing inequalities while maintaining economic stability.

For the National People’s Power (NPP) Government which emphasises the imperative of equal distribution of wealth and upliftment of rural and urban poor, the Chinese concept for achieving Common Prosperity will be a solid path to emulate. The core mechanisms adopted to implement this concept include wealth redistribution through taxation and transfers, tax reforms targeting high-income earners and corporations to address the growing wealth gap, enhanced progressive taxation, property taxes, and measures to curb tax evasion among the wealthy and social safety nets, such as improved pensions, healthcare, and education subsidies, aim to uplift low-income groups.

Major steps taken for rural revitalisation and regional development are measures to close the urban-rural divide, investments in infrastructure, agricultural modernisation, and rural industries seek to increase rural incomes and enhance quality of life and targeted funding and policy support to reduce geographic disparities in least developed provinces.

To fast track the Concept of Common Prosperity, Chinese government has encouraged philanthropy and Corporate Social Responsibility (CSR). The government encouraged wealthy individuals and corporations to contribute to social causes. Tech giants and private enterprises are being urged to support social programmes, invest in community development, and promote inclusive hiring practices. They also introduced additional distribution mechanisms existing primary (market-based) and secondary (taxation and redistribution) income distributions such as voluntary contributions through charity, foundations, and social initiatives.This mechanism emphasises moral responsibility and societal values over mere profit-making.

Another crucial step was to reform the private sector by implementing policies to regulate monopolies and ensure fair competition aim to create a level playing field.The crackdown on tech firms and real estate developers reflects a broader goal of curbing excessive corporate influence and prioritizing social good over profit.

Sustainable programmes

Together with these steps, sustainable programmes were launched to boostemployment and education through vocational training programs and reforms in the education system are designed to enhance skills and create more equitable opportunities for upward mobility.Policies promoting job creation, particularly in green industries and high-tech sectors, help address unemployment and underemployment.

While taking lessons from the successful Common Prosperity programme of China, it is advisable to take safeguards against possible pitfalls that could adversely impact economic growth. Over-regulation of the private sector risks stifling innovation and slowing GDP growth. And businesses may become cautious about investments due to perceived unpredictability in policies. The scale and complexity of addressing entrenched inequalities pose significant challenges. Excessive state intervention could harm market dynamics, leading to inefficiency. Hence, balancing redistribution with economic liberalisation remains a delicate task.

China’s pursuit of common prosperity also has international ramifications. As a major global economy, its policies can influence trade, investment, and global inequality discourse. The emphasis on reducing disparities aligns with global calls for sustainable and inclusive development, offering a potential model for other nations grappling with similar challenges.

China’s “New Era” mechanism for common prosperity marks a significant shift in the country’s developmental priorities. While challenges remain, the initiative underscores the government’s commitment to addressing inequality and fostering a more inclusive society. If implemented effectively, it has the potential to serve as a blueprint for balancing growth with equity in a rapidly changing world.

President Dissanayake is in a position to get every possible support from President Xi Jinping for implementing a comprehensive prosperity package in Sri Lanka designed under the Chinese leader’s concept of ‘New Era Mechanism for Common Prosperity’.⍐

NPP’s ‘New Era’ with China and India


NPP’s ‘New Era’ with China and India

The grand and ostentatious Indian tour, hosted by India for President Anura Kumara Dissanayake and Foreign Minister Vijitha Herath following their sweeping victories in the recent Presidential and Parliamentary Elections, concluded successfully. However, it prompted numerous questions from various political parties regarding the assurances exchanged between India and Sri Lanka, which the NPP government has sought to clarify over the past few days.

Most of the meetings with Indian officials were described as ‘Discussions’ by Foreign Minister Herath. Nonetheless, the tour ended on a positive note, with heightened optimism about the potential mutual benefits of the relationship between Sri Lanka and India.

Interestingly, upon their return to Sri Lanka, two delegations from the ruling Communist Party of China (CPC) were seen at the doors of both the JVP headquarters and the Presidential Secretariat, adding further intrigue to the evolving diplomatic dynamics. Although these visits were prearranged, their timing—immediately after the Indian tour—suggested an air of haste and secrecy on the part of the Chinese.

One delegation met with the General Secretary of the ruling leftist Janata Vimukthi Peramuna (JVP), Tilvin Silva, while the other engaged directly with the President. These meetings appear to set the stage for another grand reception in China for the NPP leader, Dissanayake, reportedly scheduled for the second week of January 2025.

At this juncture, the Sri Lankan government has reiterated its commitment to preserving the country’s territorial integrity and safeguarding India’s national security interests, assuring that it would avoid actions detrimental to India. However, the presence of the CPC delegations has sparked speculation about the foreign policy direction of the NPP, which appears to be ambiguous at this stage. These developments underscore the critical need for a coherent and well-defined policy, as the lack of clarity could pose governance challenges.

Foreign Minister Herath has argued that a comprehensive foreign policy is not immediately necessary, suggesting that traditional non-aligned approaches or generic strategic ties may no longer suffice in an era where nations demand bespoke partnerships. This perspective holds some validity. Powerful nations have crafted their own strategic frameworks—such as America’s Indo-Pacific and Quad initiatives, India’s SAGAR vision, China’s Belt and Road Initiative, France’s maritime strategy, and the Middle East’s focus on oil and gas interests—that countries like Sri Lanka must navigate carefully.

Although the NPP government has been warmly received by countries such as Russia, the United States, India, Cuba, and China, aspects of its policies remain misaligned with the expectations of these nations. There were noticeable omissions on key issues, such as the Russia-India discussions on the Mattala Airport or Adani’s renewable energy project, during the Indian visit. This highlights the geopolitical balancing act Sri Lanka must undertake to ensure these proposals and development initiatives align with its national interests.

The issue of Chinese research vessels docking in Sri Lanka, a longstanding point of contention in Sri Lanka-India relations, will test President Dissanayake’s diplomatic skills. With the current agreement prohibiting Chinese research ships set to expire on 31 December 2024, Foreign Minister Herath has announced the establishment of a committee to draft a policy framework for research vessels visiting Sri Lanka. He believes this framework could help resolve conflicts and differences. Until the policy is finalised, permissions for research vessels will remain on hold, with the new framework expected to take effect on 1 January 2025.

Tilvin and CPC Meeting

The CPC delegation met Tilvin Silva at the JVP headquarters on Wednesday morning (18). They together with several JVP office- bearers, participated in a meeting as part of an exchange programme, during which the CPC shared insights into Chinese President Xi Jinping’s ‘Common Prosperity’ initiative and its potential to support rural development in Sri Lanka, according to the JVP.

Tilvin Silva, a Marxist politician and founding member of the NPP, has been instrumental in shaping the JVP’s policies within the current government. Following the meeting, Silva remarked, “The Chinese delegation, comprising around 12 members, expressed their willingness to support Sri Lanka’s development through expertise and technology, particularly in the agricultural sector. They emphasised that they sought nothing in return and were committed to assisting us.”

The meeting appeared to reflect a tripartite agenda involving the CPC, Sri Lanka, and Singapore. Silva highlighted the long-standing ties between the JVP and the CPC stating, “We have maintained close ties with the CPC since earlier times. Now, as two governments, we will continue to nurture these ties for the benefit of Sri Lanka’s development and economic growth.”

Addressing the media about the JVP’s stance on foreign assistance, Silva clarified, “We are open to strengthening relationships with countries like China, India, Russia, and America. There is no longer a defined ‘opposition party’ in the country, and as a government, we are committed to building these partnerships without hesitation.”

Silva also dismissed speculation that the discussions included topics such as rice and fertiliser imports. “This meeting was not intended for such negotiations. Their primary focus was on offering support, and we agreed to continue discussions on various aspects of cooperation in the future,” he said.

After the meeting with Silva, the CPC delegation proceeded to the Prime Minister’s office, where they met with the PM’s Secretary, Pradeep Saputhanthri.

The CPC delegation highlighted China’s focus on ‘Common Prosperity’ under President Xi Jinping’s leadership, expressing its relevance for Sri Lanka. They explained that the initiative reflects China’s determination to address income inequality, foster equitable growth, and modernise its economic model. In separate meetings with the JVP leader and the PM’s Secretary, the delegation outlined how the Chinese government has introduced a range of policies, mechanisms, and reforms to promote wealth redistribution, social equity, and sustainable development. This policy shift, they noted, is central to China’s ‘New Era’ strategy, which seeks to balance rapid economic growth with inclusivity and fairness. They emphasised that Sri Lanka could benefit significantly from the ‘Chinese experience’ in this regard.

The concept of ‘Common Prosperity’ is not new in China, first articulated by Deng Xiaoping during the economic reforms of the late 1970s. Deng’s vision proposed that ‘some people and regions can get rich first’ to drive overall development. However, decades of rapid growth have led to significant income disparities between rural and urban areas, as well as between regions and social classes. Xi Jinping has revived and redefined this goal, focusing on reducing inequalities while maintaining economic stability.

The CPC delegation noted that the NPP government’s emphasis on equal wealth distribution and uplifting both rural and urban poor aligns with China’s ‘Common Prosperity’ objectives. They suggested that Sri Lanka could adopt similar mechanisms, such as wealth redistribution through taxation and transfers, tax reforms targeting high-income earners and corporations to address the wealth gap, enhanced progressive taxation, property taxes, and measures to curb tax evasion. Additionally, they highlighted the importance of social safety nets, including improved pensions, healthcare, and education subsidies, as essential tools to support low-income groups.

President AKD and CPPCC from China

On the same day, another CPC delegation, the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), met with President Dissanayake along with the Chinese Ambassador to Sri Lanka. The President held discussions with Qin Boyong, Vice Chairperson of the CPPCC, at the Parliamentary Complex.

What is CPPCC?

The CPPCC National Committee comprises representatives from the Communist Party of China (CPC), other political parties, non-affiliated individuals, people’s organisations, ethnic minorities, compatriots from Hong Kong, Macao, and Taiwan, returned overseas Chinese, and various societal sectors, alongside specially invited individuals. In response to economic and social developments and internal structural changes within the United Front, the CPPCC has revised and enhanced the categorisation of societal sectors.

The CPPCC represents a significant achievement by the CPC in integrating Marxist-Leninist theories on the united front, political parties, and democratic politics with the unique realities and rich traditional culture of China. Under the leadership of the CPC, it is a groundbreaking initiative that unites various political parties, prominent non-affiliated individuals, people’s organisations, and individuals from all ethnic groups and sectors of society within the political system. The Constitution of the People’s Republic of China enshrines the long-term existence and development of the CPC-led system of multiparty cooperation and political consultation.

The CPPCC serves as an organisation of the Chinese people’s patriotic united front. It is a key mechanism for multiparty cooperation and political consultation under the CPC’s leadership, playing a pivotal role in promoting socialist democracy and practising whole-process people’s democracy in China. As a specialised body and an essential channel for socialist consultative democracy, the CPPCC is a vital component of the state governance system and a uniquely Chinese political institution.

During discussions with the NPP government and President Dissanayake, the Chinese delegation elaborated on the overarching goals for the CPPCC’s work in the ‘new era’ of China. These goals emphasise adherence to the guidance of President Xi Jinping’s Thoughts on Socialism with Chinese Characteristics for a New Era. This includes upholding CPC leadership and implementing the principles set forth at the 20th National Congress of the CPC and the Central Conference on CPPCC Work.

The delegation outlined the importance of deeply understanding the decisive significance of establishing Comrade Xi Jinping’s core position within the Party and recognising the guiding role of his thought. Additionally, the objectives call for heightened political integrity, alignment with the Party’s broader vision and leadership, and strengthened confidence in the path, theory, system, and culture of socialism with Chinese characteristics. Moreover, they stressed maintaining General Secretary Xi’s core position in the Party and ensuring the authority and centralised, unified leadership of the CPC Central Committee.

Since its establishment, the CPPCC has played a significant role in the founding and development of the People’s Republic of China (PRC). It has been instrumental during historical periods of socialist revolution, development, and reform. On 30 April 1948, on the eve of the final victory in the People’s War of Liberation, the CPC issued the ‘May 1st’ slogan, calling for “all democratic parties, mass organisations, and community leaders to immediately convene a political consultative conference to discuss the convening of a conference of people’s representatives and the establishment of a democratic united government.” This call received enthusiastic support, marking a crucial moment in the establishment of the PRC.

China asks to restart stalled marine research activities in Sri Lanka

During the meeting, Vice Chairperson Qin Boyong expressed her expectation to further strengthen the longstanding relationship between China and Sri Lanka while collaborating with the new government in the future.
At the meeting, President AKD stressed the continued need for Chinese assistance and also highlighted the necessity of completing the Chinese-funded section of the Central Expressway, which remains incomplete. He also noted plans to expedite the initiation of supply hubs and institutional projects centred around the Colombo Port City and the Hambantota District.
Vice Chairperson Qin pointed out her plans to restart stalled marine research activities and to commence pending projects for various reasons. This comes in the wake of India’s calling to be cautious about entertaining Chinese vessels. This matter has been now taken up at the State level to hold discussions, according to Foreign Minister Herath.

Qin also expressed expectations of establishing Chinese companies within the Hambantota Investment Zone to provide Sri Lanka with better global access. Moreover, preparations are in place to welcome President Anura Kumara Dissanayake during his upcoming visit to China.

Minister of Foreign Affairs, Foreign Employment, and Tourism, Vijitha Herath, Deputy Speaker Dr. Rizvie Salih and CPPCC committee member Ma Youxiang, among others, were present at the occasion.

Joint Statement and MoUs

The official statement by the AKD and the joint statement were issued after the conclusion of the Indian tour. These statements primarily emphasised strengthening the ties between Sri Lanka and India. Meetings were held with the Ministry of Health, as well as with Prime Minister Modi and the President. Visits included the Bodhgaya site and the India Foundation.

During the tour, the NPP signed two MoUs for public servants, one focusing on a two-week training programme and the other for training 1,500 public servants. Another one was for revoking double taxation while trading between India and Sri Lanka.

Regarding research ships entering Sri Lanka’s territorial waters, the government explained its approach to national security in relation to this issue. Though It was noted that no harm would stem from this, the need for a national policy on research was identified.  A discussion is being held to appoint a special committee, which will not only focus on research ships but also address the flow of ships coming to Sri Lanka. A proper implementation framework is to be established, and a report on this will be prepared. Minister Herath noted that a decision has already been made to appoint a special committee for this purpose.

At the outset, India raised concerns regarding research ships and land. They will follow the standard operating procedure (SOP), and the ban imposed last year will remain in effect. “We are preparing a new SOP, and there are proposals that need to be updated. The ban has not been relaxed, and the committee will make a decision after 31 December.”

Noticing the juggernauts of India and China navigating their own dynamics and settling their scores on Sri Lankan soil, it becomes increasingly challenging—and potentially traumatic—for Sri Lanka to sideline either of them.

The CPC’s presence and its BRI strategy, alongside India’s Neighbourhood First Policy and its ties with the Quad, will continue to shape their dynamics, with the NPP closely observing and experiencing the unfolding developments, having given assurances to both sides.⍐

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