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New Article in Public Finance Research by Director Prof. Yang Canming
publish date:2022-06-09 publisher:Li Yuetong

 At the congress celebrating the 100th anniversary of the founding of the Communist Party of China, General Secretary Xi Jinping solemnly proclaimed, "Through the sustained struggle of the entire Party and the people of all ethnic groups, we have achieved the first 100-year goal, built a moderately prosperous society on the Chinese land, and historically resolved the problem of absolute poverty." This is a great practice of the CCP's century-long theory of poverty reduction, a great achievement of the CCP's century-long struggle, and a great innovation of the Marxist theory of poverty reduction, contributing Chinese power, Chinese wisdom and Chinese solutions to the governance of global poverty and the achievement of poverty reduction goals. The Resolution of the CCP Central Committee on the Major Achievements and Historical Experience of the Party's Centennial Struggle, adopted at the Sixth Plenary Session of the 19th CCP Central Committee, pointed out that the Party's centennial struggle has fundamentally changed the future destiny of the Chinese people and demonstrated the powerful vitality of Marxism. With difficult exploration and continuous innovation, the CCP's century-long theory and practice of poverty reduction has enriched and developed the Marxist theory of poverty reduction and has become a distinctive representative of socialism with Chinese characteristics.

  I. Adhere to the people-centered concept of poverty reduction

  The people-centered concept of poverty reduction has been a theoretical evolution and practical exploration of Marxism's Chineseization, and it is the concept of poverty reduction that China has always adhered to in its poverty reduction practice. In the Communist Manifesto, Marx and Engels pointed out that "instead of the old bourgeois society with its classes and class antagonisms, there will be such a union where the free development of each person is the condition for the free development of all people" and "the comprehensive and free development of man is the basic principle of the future communist society. The full and free development of man is the basic principle of the future communist society." Peoplehood is the distinctive color of Marxism, and the goal of putting the people at the center and achieving the liberation of all people from poverty is the vivid practice of Marxist theory of poverty reduction in China.

  The CCP has established the original intention of serving the people since its establishment. In 1939, Comrade Mao Zedong proposed the concept of "serving the people" in a letter to Comrade Zhang Wentian, and emphasized repeatedly that only the people are the real driving force of historical development. Comrade Deng Xiaoping developed the concept of serving the people into the footing of the "three favorable criteria", that is, the starting point and the footing of reform are to continuously improve the living standard of the people. Since the 18th Party Congress, General Secretary Xi Jinping has put forward the people-centered thinking, pointing out that "the people's aspiration for a better life is the goal of our struggle" and "we must adhere to the people-centered development ideology and continuously promote the comprehensive development of people and the common prosperity of all people. "This is the inheritance and sublimation of the thought of serving the people in the new era.

  The people are neither the object of charity nor the object of help. On the issue of poverty reduction, the Communist Party of China insists that "development is for the people and development relies on the people", and focuses on stimulating the endogenous motivation of the poor, emphasising that the people themselves take action to solve their own poverty problems. In China's anti-poverty process, the determination and courage of the poor groups to get rid of poverty are enhanced by supporting ideas, concepts and confidence, and the endogenous development momentum of the poor groups to get rid of poverty is enhanced by supporting knowledge, technology and ideas, effectively stimulating the enthusiasm of the people as the main body of anti-poverty, forming a major trend of poverty reduction with the people at the centre and the whole Party and society participating and working together. In the revolutionary era, we relied on the people, and it was the ocean of people's war that drowned our enemies; in the war against poverty, we are still fighting a people's war, relying on the strength of all the people to get rid of poverty and achieve overall prosperity; the Sixth Plenary Session of the 19th CCP Central Committee further emphasised that the whole Party must always maintain flesh-and-blood ties with the people and practise people-centred development. Throughout the various periods when the CCP led the Chinese revolution and construction, it always adhered to the people-centred philosophy, which is a major contribution to the Marxist theory of anti-poverty.

  II. Adhere to the balance between efficiency and equity

  Comrade Deng Xiaoping emphasized that "the essence of socialism is to liberate the productive forces, develop them, eliminate exploitation, eliminate polarization, and ultimately achieve common prosperity." In order to successfully promote the realization of the goal of common prosperity, Comrade Deng Xiaoping proposed the development idea of "giving priority to efficiency and taking into account fairness" according to the actual situation of China's economic and social development at that time, and proposed that "some regions and some people should get rich first", those who would lead the latter to become rich, and eventually achieve common prosperity.

  During the New Democratic Revolution, based on the economic and social realities of rural areas, the production and supply model of "centralized leadership and decentralized management" was implemented. At the beginning of the reform and opening-up period, due to the low level of productivity development and insufficient product supply capacity, more attention was paid to efficiency in order to promote rapid economic development. As a basic guarantee, the government supported the socialist transformation of agricultural production by adjusting the agricultural tax, industrial and commercial tax, and allocating funds for rural cooperatives; eliminating private capitalism by replacing the income tax with a business tax to peacefully transform private enterprises of capitalists; and allocating funds for the capital construction of the national "Five-Year Plan". The Five-Year Plan provided a solid financial base for industrialized production. As economic and social development and income disparity evolved, the 17th and 18th Party Congresses emphasized in their reports that "both the initial distribution and redistribution should take into account efficiency and equity, with redistribution paying more attention to equity."

  Entering the new era of socialism, the CCP emphasizes the need to adhere to the people-centered development ideology, promote common prosperity in high-quality development, correctly handle the relationship between efficiency and equity, and build a basic institutional arrangement with coordinated and complementary primary, redistribution and tertiary distribution. Among them, finance is an important tool for the government to regulate and coordinate economic and social operations, and is at all times the main lever for the government to coordinate resource allocation and guarantee public services, so it is also a lever to ensure social equity and a strong guarantee for substantial progress in common prosperity. The Communist Party of China has effectively alleviated regional poverty through a regional developmental poverty alleviation strategy, tilted by financial support, while balancing equity and efficiency and allowing more people to enjoy the benefits of development. This is a major innovative development of Marxist anti-poverty theory, which is in line with China's national conditions and has been proven to be a successful path by Chinese practice.

 III. Adhere to the public ownership as the major body

  It is a basic principle embedded in Marxism that the distribution of the conditions of production determines the distribution of the fruits of production. The CCP has firmly grasped the core element of ownership of the factors of production and improved the poverty reduction system by continuously improving the ownership relationship. During the period of the New Democratic Revolution, under the leadership of the CCP, the "fight against the landlords and the division of land" was carried out to realize "the cultivator has his own land" and eliminate feudalistic production relations. This greatly mobilized the peasants' enthusiasm for production, significantly improved rural productivity, and alleviated the poverty of the peasants' hardship.

  During the period of socialist revolution and construction, the completion of the three major socialist transformations established the socialist system and achieved the goal of socialist public ownership of the means of production. However, the arduous exploration in the early construction period clarified the reality that China was still in the primary stage of socialism and that the liberation and development of the productive forces were fundamental. Based on this, Comrade Deng Xiaoping proposed reform and opening up and the establishment of a socialist market economy system. In this context, the "separation of two rights" of rural land promoted by the household contract responsibility system and the development of individual rural economy driven by the construction of township enterprises have greatly released the vitality of rural development, effectively increased the enthusiasm of farmers' production, and promoted a large number of farmers to escape from poverty.

  The 19th Party Congress further proposed to establish the public ownership system as the main body and the joint development of multiple ownership economies as the basic socialist economic system, and further deepen the reform of the land system and implement the policy of separation of land ownership, contracting rights and management rights. This not only respects the decision making will of farmers, but also protects the legitimate rights and interests of village collectives and contracted farmers, thus promoting rural economic development and driving farmers out of poverty and wealth. Insisting on the improvement of ownership relations under public ownership provides a solid foundation for the innovation and improvement of China's poverty reduction system, which is also a creative development of Marxist distribution theory.

  IV. Adhere to financial leadership

  In the century-long practice of the Chinese Communist Party in poverty reduction, the leading role played by finance should not be overlooked, and the scientifically arranged fiscal policy has provided a strong financial guarantee for China's fight against poverty. During the New Democratic Revolution, Comrade Mao Zedong pointed out in "Our Economic Policy" that "developing the national economy to increase our fiscal revenue is the basic policy of our fiscal policy". This laid the foundation of financial resources for the victory of the New Democratic Revolution. During the period of socialist revolution and construction, the fiscal system represented by the "state budget" strongly supported the socialist transformation and industrial system construction, and laid a solid foundation for development. Since the reform and opening up, the comprehensive reform of the fiscal system has broken the shackles of centralized management, and the reform of the tax sharing system has successfully stimulated the development of rural areas and towns and broadened the income channels of the masses of farmers. The improvement of the fiscal system has not only provided the government with sufficient financial resources to support poverty reduction, but also indirectly increased the income of the poor and promoted the development of poverty reduction.

  Entering the 21st century, the 16th Party Congress put forward the development strategy of promoting economic restructuring, and finance has also opened a new round of supporting reforms under the guidance of the scientific outlook on development. On the expenditure side, support for agricultural production and subsidies for farmers' livelihoods were increased, as well as investment in rural infrastructure construction and education and medical care. On the revenue side, in accordance with the task of "implementing the reform of the taxation system in steps" and the reform principle of "simplifying the taxation system, broadening the tax base, lowering the tax rate and tightening the administration", the urban and rural taxation system was unified and the agricultural tax was abolished. This round of reform has greatly liberated the peasants, bringing real benefits to them and effectively reducing their burden, reflecting the Party and Government's philosophy of governing for the people and supporting the socially vulnerable.

  The Central Economic Work Conference proposed supply-side structural reform in the new era of socialism with Chinese characteristics. Fiscal expenditure has been strictly enforced by the requirement of "three to go, one to drop and one to compensate", special funds have been arranged to dispose of zombie enterprises and properly solve the problem of employee resettlement, promote the merger and restructuring of enterprises in overcapacity industries and speed up their liquidation, and promote the elimination of winners and losers. In terms of revenue collection and management, the merger of national and local taxation departments below the provincial level was carried out, and the distribution of tax revenue between the central and local governments was adjusted to complement the improved distribution of powers and responsibilities between the central and local governments. In line with the structural transformation of the economy, the full implementation of the camp reform and the elimination of double taxation. The reform of the financial and taxation system has always focused on the livelihood of the needy, further consolidating and expanding the results of poverty eradication and helping to revitalise the rural areas.

  The miracle of China's rapid economic growth relies on the continuous reform and improvement of the fiscal system, which has also provided a solid financial backing for economic and social development, as well as sufficient financial support for strategies that rely on development to address regional poverty. The design of China's poverty reduction policies cannot be separated from the fiscal-led tilting of resources, and even more so from the continuous improvement of the fiscal allocation system. China's century-long poverty reduction process is also a historical portrayal of the continuous reform of China's fiscal system.

 V. Targeting poverty reduction to rural areas and farmers

  While Marx, Engels and Lenin, among others, focused on the proletariat, represented by the working class, on the issue of poverty, the Chinese Communist Party has always aimed at poverty reduction in the countryside and among the peasants. In combining Marxism with Chinese practice, the Chinese Communists, represented by Comrade Mao Zedong, explored the path of encircling the cities in the countryside and seizing power with arms, and made it their goal to work for the interests of the people, always focusing on the problems of the peasants and land in China. Through extensive research and in-depth thinking, Comrade Mao Zedong wrote a series of articles such as "Analysis of the Classes in Chinese Society", "Report on the Investigation of the Peasant Movement in Hunan" and "On New Democracy", in which he repeatedly argued the importance of the Chinese peasant issue to the Chinese revolution and proposed linking the turning over and liberation of the Chinese peasants to the transformation of Chinese society. In Analysis of the Classes in Chinese Society, he pointed out that the broadest and most loyal allies of the Chinese proletariat were the peasants; in Report on the Study of the Peasant Movement in Hunan, he proposed that the peasants were the most powerful main force of the revolution; and in On New Democracy, he stressed that the peasant question was the fundamental question of the Chinese revolution. On the issue of anti-poverty, the CCP was not only concerned about the fate of the urban working class, but also based on the reality that China was a backward agricultural society at that time, and through the political revolution centred on the agrarian revolution, it made leading the peasants to turn over their lives and become the masters of their own house the top priority of the revolution. Therefore, during the period from 1921 to 1949, the Chinese Communist Party took the liberation and development of the productive forces as the main line of anti-poverty work throughout this period. The specific idea was to reduce poverty by means of changes in land finance, such as the explicit proposal to "abolish all landowners' land ownership" and "distribute land to peasants and other poor people who lacked property".

  China was in the transitional stage from the New Democratic Revolution to the Socialist Revolution between 1949 and 1956. The planned economic policy, based on public ownership, provided a strong institutional guarantee to escape from poverty. During this period, financial efforts supported rural poverty reduction mainly through relief and developmental poverty alleviation. Relief-based poverty alleviation is reflected in the implementation of the rural five-guarantee policy and the rural cooperative medical system, which provides assistance to rural families in special hardship, families without a labour force and families with no one to support or maintain them by setting up special funds and using relief in kind as the main method. Developmental poverty alleviation is mainly reflected in the large-scale infrastructure construction carried out throughout the country, such as improving basic production conditions such as irrigation and transportation, and increasing investment in rural basic education and public health. This phase of poverty reduction has been very effective in the areas of education and health.

  The Third Plenary Session of the Eleventh Central Committee of the Party in 1978 clearly pointed out the reality that "most of the country's rural areas are still in a state of poverty". In 1986, the State Council set up the Leading Group for Economic Development of Poverty-stricken Areas under the State Council, a leading agency for poverty alleviation in rural areas, and in 1993, it was officially renamed the Leading Group for Poverty Alleviation and Development under the State Council. In 1994, the State Council began to implement the "Eighty-seventh Poverty Alleviation and Development Plan", and in 2001, it issued the "Outline for Poverty Alleviation and Development in Rural China (2001-2010)", and in 2013, General Secretary Xi Jinping In 2013, General Secretary Xi Jinping proposed "precise poverty alleviation" to start the fight against poverty in China. Since China's reform and opening up, poverty reduction has always focused on rural farmers, and has given full play to the role of finance as a financial guarantee in poverty reduction, providing special loans for poverty reduction, food-for-work funds and financial development funds for rural poverty reduction.

 VI. Insist on comprehensiveness and precision

  There is no doubt about the complexity of the poverty problem, and the many poverty alleviation policies and the series of poverty eradication initiatives proposed by the CCP since the reform and opening up have effectively promoted poverty reduction in terms of both comprehensiveness and precision, which is a major contribution to the Marxist theory of poverty reduction.

  First, the comprehensiveness of poverty reduction. In addressing the problem of poverty, the CCP insists on exploring the nature of poverty from a comprehensive and multi-dimensional perspective, and on the premise of adhering to the Marxist theory of distribution and the distribution system, it alleviates multi-dimensional poverty by improving the economic system. Firstly, the Communist Party of China emphasises the Marxist distribution theory of "distribution according to work", which stresses the justice of the starting point, process and outcome of distribution and its sharing by all. Secondly, by adhering to the path of socialism with Chinese characteristics, China has now developed a distribution system in which "distribution according to labour is the mainstay and multiple modes of distribution co-exist". Lastly, China has insisted on the development of the public ownership system as the mainstay and the co-existence of a variety of ownership systems as the basic socialist economic system, so as to alleviate income poverty by improving the economic system. In the fight against poverty in China, the CCP has always adhered to the above three basic principles, and then formed a "three-in-one" poverty alleviation framework by building a multi-dimensional and comprehensive three-dimensional poverty alleviation framework, including "special poverty alleviation, sectoral poverty alleviation, and social poverty alleviation", and has implemented a multi-dimensional approach to poverty alleviation in the areas of education, healthcare, social security, and ecological environment. The "three-in-one" approach to poverty alleviation, which includes education, health care, social security and ecological environment, has effectively solved the problem of poverty in China.

  Second, the precision of poverty reduction. General Secretary Xi Jinping has innovatively put forward the important idea of precise poverty alleviation, adopted the "six precise" and "five batches" basic strategies, and made precise efforts to solve the problem of poverty reduction not being implemented on the ground and in detail, contributing Chinese wisdom and Chinese solutions to the world's fight against poverty. The key to solving the poverty problem lies in precision. The key to solving the poverty problem lies in precision, and the difficulty lies in precision. To truly achieve the goal of "not worrying about food and clothing, and guaranteeing compulsory education, basic medical care and housing security" for the rural poor, we must deal with the five issues of "who to support, who to support, how to support, how to withdraw and how to stabilise". The five aspects of "who to support, who to support, how to support, how to withdraw and how to stabilise". The idea of precise poverty alleviation is not only a great innovation in the CPC's theory of poverty alleviation, pointing out a new direction of struggle for poverty alleviation in China, but its profound meaning and the many policy measures derived from it have also contributed to the continued development of Marxist theory of poverty alleviation in theory and practice.

 VII. Adherence to effective strategic convergence

  In the century-long practice of poverty reduction in China, the Chinese Communist Party has always focused on the rural areas, based on the reality that the "three rural issues" have long existed in China and have been an obstacle to economic and social development. Although China has made remarkable achievements in poverty reduction, and the problem of absolute poverty has been solved comprehensively and effectively, and the national task of poverty eradication has been completed, there is still a need to consolidate the foundation. General Secretary Xi Jinping has repeatedly stressed that "removing poverty is not the end, but the starting point for a new life and a new struggle".

  To continue the fight against poverty and promote rural development, the 19th Party Congress has innovatively put forward the strategy of revitalising the countryside. The rural revitalization strategy is a systematic summary and sublimation of Marx and Engels' theory of the "three rural areas", and is a new achievement of the Chineseization of Marxist theory of the "three rural areas". Marx believed that "agriculture is not only a prerequisite for individual independence and development, but also the basis for the development of other sectors of the national economy", and that the fundamental status of agriculture clearly establishes its primacy as a prerequisite for human survival and development. Moreover, Marx and Engels proposed that corresponding governance measures would continue to arise during the transition from the socialist to the communist stage, and that the urban-rural distinction would be gradually eradicated, eventually leading to the integration of urban and rural areas, which is also the inevitable result of the advancement of social division of labour and the continuous development of productive forces. The strategy of rural revitalization is precisely a solution to the "three rural issues" based on such a Marxist viewpoint and the actual situation in China.

  While poverty alleviation has solved the basic security problems of agriculture, rural areas and farmers, the gap is still far from the general requirement of rural revitalisation, and the risk of poverty and return to poverty still exists. In the next stage, more sustainable public development of agriculture and rural areas and channels for farmers to increase their income and wealth are needed as effective guarantees to consolidate the results of poverty eradication and comprehensively promote rural revitalisation. The revitalisation of the countryside is not only a historical continuation of the CPC's practice of poverty reduction, but also an innovative initiative to promote the solution of the "three rural issues". It is the practice of Marxist theory of "three rural areas" in China, and provides new ideas for the sublimation of Marxist theory of poverty reduction.

  VIII. The ultimate goal of poverty reduction to achieve common prosperity

  The Chinese Communist Party's century-old practice of poverty reduction has successfully solved the problem of overall regional poverty, accomplished the arduous task of eliminating absolute poverty, and created another earthly miracle that will go down in history! However, as General Secretary Xi Jinping pointed out, "there is still a long way to go to solve the problem of unbalanced and inadequate development, narrow the gap between urban and rural areas, and achieve comprehensive human development and common prosperity for all people". The CPC's century-long innovation in the theory and practice of poverty reduction has not only strengthened the foundation for the new journey towards common prosperity from a material perspective, but also provided ideas for achieving common prosperity from a theoretical perspective. The achievement of a moderately prosperous society and the winning of the battle against poverty have opened a new chapter in the realisation of common prosperity.

  Common prosperity is the essential requirement of socialism. As absolute poverty has been completely eliminated through the CPC's century-long struggle against poverty and the unremitting efforts of the people, the gradual achievement of common prosperity has become the main goal of the next stage in the comprehensive construction of a strong socialist communist country. Based on the CPC's century-long theory and practice of poverty reduction, it is necessary to continue to adhere to the following aspects in the process of promoting the achievement of common prosperity: First, to continue to adhere to the road of socialism with Chinese characteristics. The history of the CPC's struggle for poverty reduction and the history of the development of New China tell us that it is the road of socialism with Chinese characteristics that will guide the Chinese people to the victory of socialism and the achievement of common prosperity. Second, we must continue to adhere to the people-centred development concept. It is the people who are the heroes and subjects of history-making. It is necessary to adhere to the people-centred development concept, to stimulate the enthusiasm and vitality of the people's struggle, and to forge ahead towards achieving the Chinese dream of the great rejuvenation of the Chinese nation. Third, we must continue to insist on narrowing the gap between urban and rural regional development. We must continue to insist on narrowing the gap between urban and rural regional development, and promote the achievement of common prosperity through the rural revitalisation strategy and the new urbanisation strategy.

  During its century-long practical exploration of poverty reduction, the Communist Party of China has continuously inherited and developed the Marxist anti-poverty theory, which is rich in connotation, clear in practical direction and advancing in quality with the times. It has provided theoretical guidance and fundamental guidelines for China's anti-poverty practices in different periods. In the new journey of achieving common prosperity in the future, we should continue to inherit and develop the centuries-old theory of poverty reduction of the Communist Party of China, to achieve common prosperity with greater determination and courage, and to build a strong socialist publicised country that is rich, strong, democratic, civilised, harmonious and beautiful.