Shortly after the Chinese government announced a slew of economic stimuli to resuscitate the economy, a new form of aid has been established. China is set to offer cash handouts to “extremely poor people, orphans, and other needy people.”
On Wednesday, China’s Ministry of Civil Affairs reported that these subsidies will be rolled out before China’s National Day on 1st October. The report did not provide details on the sum of money the government intends to distribute to those in need.
Bridging the wealth gap in China remains at the forefront of Xi Jinping’s economic policy. Shaun Rein, founder of China Market Research Group, reiterated the underlined sentiment to CNBC: “Xi Jinping and the CPC are laser-focused on giving a hand to low- and middle-income Chinese through his common prosperity drive. He is focused on building equity in poorer regions.”
Common prosperity was introduced in China under the leadership of Mao Zedong in the 1950s. This concept was revisited in 2021 when Chinese policymakers pushed for moderate wealth for all citizens. Chinese President Xi Jinping has propelled his vision to cultivate economic equity in China. Yet, deploying one-time handouts within such a brief timeframe remains uncommon.
Earlier this week, Li Zhong, China’s vice minister of human resources and social security, claimed that the country has “the world’s largest social security network.” According to Zhong’s comments at the same press conference, “the number of people covered by basic old-age insurance, unemployment insurance, and work-related injury insurance had reached 1.07 billion, 245 million, and 301 million, respectively.”
Zhong also praised China’s social security infrastructure, allowing “98% of China’s population to possess social security cards” at ease. It must be noted that China’s altruistic cash handouts for the poor are a first for the Communist nation. Unlike its Western rivals, China did not roll out cash allowances during trying times like the COVID-19 pandemic.
As of November 2023, 40.4 million people in China were covered by subsistence allowances. In urban areas, the average allowance was about 779 yuan ($110.80) per person, while those residing in rural pockets received 615 yuan.
