Common Prosperity, Without Illusions

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Although Beijing has made “common prosperity” one of the defining themes of China’s current political economy, and although the phrase has attracted intense attention abroad, Li Shi’s recent lecture leaves little room for optimism about the road ahead.Beijing’s recent call to “invest in people”（投资于人）can sound, at first, like another broad policy slogan. Li Shi’s lecture gives it a much harder meaning. For him, the phrase is not a soft add-on to growth policy, but a response to the central dilemma facing common prosperity: slower growth is making it harder to expand the pie, while entrenched gaps in income, wealth, public services, and human-capital investment are making it harder to share it fairly. His lecture therefore does two things at once. It explains why “investing in people” has become necessary, and then turns the slogan into a concrete reform agenda — higher household incomes, more support for low-income families, hukou and education reform, fairer public services, and, finally, freedom.Li, Senior Professor and Dean of the Institute for Common Prosperity and Development at Zhejiang University, laid out at Peking University just how formidable the obstacles have become. Common prosperity is not about national strength in the abstract. It is about whether ordinary people become more prosperous, and whether the gains of development are shared more fairly. That requires China to do two things at once: “make the cake bigger” and “divide the cake better.” Both tasks are becoming harder, he said recently.On growth, Li listed a series of mounting pressures. China’s growth…