'Give back to society': Jinping puts China's wealthiest on notice for excessive income

Calling for curbs on 'excessive' income, China's President Xi Jinping has put the country's wealthiest people on notice and asked them to give back to society.

Chinese state media reported that the Communist party’s Central Financial and Economic Affairs Commission, chaired by Xi, has announced that it is now prioritising “common prosperity for all”.

China's income inequality is massive with the rich earning 20 per cent more than the poor. It has not budged since 2015.

The regulatory storm that washed billions from Chinese corporate valuations in the name of curbing excesses exposes not only the policy risk under President Xi Jinping's increasingly activist tenure, but also the uncertainty over implementation.

Xi's campaign to clamp down on industries ranging from internet platforms and bitcoin to ride-hailing giant Didi Global and tutoring marks a historic shift as he prioritises broad-based prosperity over the all-out growth pursued for decades by China.

The furious pace of new rules and regulations, and the blunt and sometimes unpredictable force with which they are being implemented in the world's second-biggest economy have roiled companies and markets.

Xi, by contrast, is widely seen as China's most powerful leader since Mao Zedong, which analysts say fuels an ardour for implementation and amplification by China's sprawling bureaucracy. It can also carry a risk of overzealous execution as lower-level officials aim to please their higher-ups.

Last week, jittery investors dumped shares in vaping firms, chemicals makers, growth hormone stocks and distillers as they pored over state media stories and government websites for clues to the next target of government action. That came after a state media story labelling online games "spiritual opium" triggered a sector sell-off, even though no rules had changed.

(With inputs from agencies)