On the evening of August 26, 2021, Professor Liu Lingling from the Department of Economics of Tsinghua SEM attended the “Tsinghua MBA Renowned Faculty Lecture” online, and shared her “Thoughts on Common Prosperity” with Tsinghua MBA students and alumni, providing an in-depth interpretation of common prosperity from perspectives of international experience, national development goals, income distribution reform, social opinion and etc.

Ms. Ma Jia, Director of Tsinghua MBA Programs, hosted the lecture. As Ms. Ma introduced, Professor Liu Lingling has made great devotion to Tsinghua MBA Programs, and she has lectured on the required course “China and the World Economy” and the elective course “Macroeconomic Issues Analysis”, which have been well received by students. In this semester, Professor Liu Lingling launched for Tsinghua MBA the first “China ESG Practice Innovations”, delivered successfully the “Exploration of Qiandao Lake”, and led students to make field visits to the "Water Conservation Fisheries" of Qianfa Group.

As the lecture started, Professor Liu Lingling shared her view from the perspective of international experience that common prosperity is the “prescribed step” for the country to realize modernization, and also the step that cannot be missed on the way forward to modernization. She cited previous examples of developed countries like the “Model Cities Program” in the US and the “Village Revitalization Movement” in Japan, to illustrate that narrowing the urban-rural gaps and regional differences, and establishing an “olive-shaped” society are the core meaning of common prosperity pursued by all countries. However, in the historical process of pursuing common prosperity, social problems in developed countries have gradually accumulated and become increasingly apparent: over the years, the distribution of social wealth has become increasingly unfair, consumer demand has continued to shrink, and without the input of new productivity, it is impossible to create more wealth from the supply side. Professor Liu Lingling pointed out that China is on the way to modernization and we need to be prepared for potential dangers even in times of peace. As the old saying goes “Past experience, if not forgotten, is a guide for the future”, the lessons of developed countries cannot be ignored. The challenge lies in how to design a comprehensive system to rationally plan the funds for future renovation, how to encourage technological innovation, how to solve problems after the labor transfer, how to restrict the continuous increase of the Gini coefficient (i.e., the increasing gap in income levels), and how to promote the country to achieve sustainable development so we could avoid problems encountered by other countries. China needs to draw on experience from others, carry out careful research, and make preliminary plans.

China's national development goal is to build a society of common prosperity. Professor Liu Lingling mentioned that the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China (CPC) listed 13 “significant advantages” of “our country's national system and national governance system”. One of the significant advantages is that we adhere to the people-centered development thinking, continuously guarantee and improve people's livelihood, enhance people's well-being, and take the path of common prosperity. At the Fifth Plenary Session of the 19th Central Committee of CPC, General Secretary Xi Jinping pointed out that the promotion of common prosperity for all people must be placed at a more important position. In the Long-Range Objectives through the Year 2035, it is proposed that “the per capita GDP will reach the level of moderately developed countries, and the middle-income group will be significantly expanded”, and “the common prosperity for all people will achieve more obvious substantive progress.” Professor Liu Lingling pointed out that it is the first time that such an expression has appeared in the plenary meeting documents of CPC, and this not only conforms to the principle of seeking truth from facts and the law of development, but also takes into account the needs and possibilities, so that it can be positively and securely handled.

How to achieve sustainable development on the way to common prosperity? Professor Liu Lingling explained in detail the basic institutional arrangements for income distribution reform. Starting from the concept of three distributions (primary distribution, redistribution, and third distribution), she emphasized that on our way to common prosperity, China should adjust the Gini coefficient during development: to expand the proportion of middle-income groups, increase the incomes of low-income groups, make reasonable adjustment of excessively high income, and inject new momentum into the economy and raise consumption levels through innovating consumption models. At present, the state has adopted a series of major deployments, including establishing a trustworthy society, a society ruled by law, advancing administrative reforms, optimizing the business environment, and deepening the reform of state-owned enterprises. Regarding the third distribution, she explained in more detail that this distribution mechanism, designed to be based on social responsibility and driven by ethics and morality, reflects the concept of self-government and diversity of interest equalization, and the government should guide, encourage, and provide proactively necessary support and assistance in terms of the system.

Professor Liu Lingling pointed out that we have to correct some misunderstandings about common prosperity in public opinion, and must not misunderstand national policies and arrangements as compulsory “equal wealth”. She said that seeking happiness for the people is the foundation of the CPC's long-term governance. Meanwhile, income distribution reform is complicated. The reform of the fiscal and taxation system in the “14th Five-Year Plan” aims to gradually improve the direct taxation system, improve individual income tax system that combine the integrated and classified, and strengthen the “tax regulation and supervision of high-income earners.” In addition, we also learn from the experience and lessons of developed countries in fiscal and taxation policies.

In the question-and-answer session of the lecture, some student asked how the change of business orientation in the establishment of a prosperous society will affect the development of different industries; some student would like to know how companies can help the country achieve common prosperity while maintaining the motivation for innovation, considering excess profits is an important source of innovation. Professor Liu Lingling patiently answered the questions of the students one by one. The lecture has attracted enthusiastic registration of MBA students, and also aroused students’ keen interest in heatedly discussed topics such as common prosperity and social responsibility.

Written by: Wan Jun, Zhang Jingying, Ma Jia

【Tsinghua MBA Renowned Faculty Lecture】

Tsinghua MBA Renowned Faculty Lecture is a course of a series of lectures launched by Tsinghua MBA Programs in April 2013 for MBA students and alumni. At each class, a renowned Tsinghua MBA lecturer is invited to explain new management knowledge, analyze current affairs and economics, share wisdom and experience, and have interactive exchanges with audience.

Professor Liu Lingling

Professor Liu Lingling is a PhD in Philosophy of Renmin University of China. From June 1996 to May 1998, she engaged in post-doctoral research at Tsinghua SEM. From May 1998 to present, she has served as a professor in the Department of Economics of Tsinghua SEM. Her main research areas include China's public finance, tax law and tax system, macroeconomics, rural economy and fiscal policy, transition economy and modernization theory, economic game theory, and the design of fiscal system. The main courses she has taught include “Public Finance” (undergraduates), “Public Choice Theory” (elective courses for graduate students), and “China’s Macroeconomic Analysis” (MBA course). The papers and monographs mainly include “Fiscal System Reform and Local Financial Power Changes under the Tax Sharing System”, “Establishing our country's Fiscal Revenue Capability Measurement System” (Tax Research, Issue 3, pp. 26-29, 2007), “People's Sovereignty-the Logical Starting Point of Financial System Design " (Fiscal Research, Issue 11, pp. 2-4, 2005); “China Public Finance”, etc.

Professor Liu Lingling has won many awards, such as the second prize of Tsinghua SEM Teaching Achievement in 2010, 2013, and 2014, the outstanding Communist Party member of Tsinghua University in 2007, the third prize of 2006 National Statistical Excellent Paper, and 2006 the highest award for teaching achievement in Tsinghua University (the “Chinese Rural Social Survey” project of the School of Economics and Management), the 2003 Tsinghua University Teaching and Educating Model Award, the Tsinghua University “Friends of Teachers” Award in 2000, and the Tsinghua SEM Outstanding Teacher Award in 1999 ; Second prize for outstanding teachers of Tsinghua University in 1997.