Bank of China Ltd , China's fourth-largest lender by assets, has launched a countrywide exercise to reduce the salary gaps among its employees and mid- and high-level managers in response to Beijing's "common prosperity" drive, three sources with knowledge of the matter said.
They will argue. Pay rise for everyone. Will nject huge amounts of money into the econ. Raising inflation. While this means the low earners gain or lose little. Amd the rich lose much.
It will totally destroy those that cannot work or earn at all. IE retired poor or unemployed.
Should be fine tbh, China actually had a bit of shrinking of consumer spending recently so this is well timed.
Issue is 2 fold.
One. Lets face it. No econ can handle such a huge raise in income. Without it seriously effecting the internal market.
And that huge increase will slowly if at all move to those not currently earning. IE retired or disabled etc.
But even if the econ could manage it. By for example borrowing to raise unemployed incomes while things settle.
Those making the decisions will worry more about the effect on their econ and currency compared to other nations. Not doing the same thing.
In genral governments tend to ( to some extent rightly) value their currencies buying power with other nations. More then the internal markets.
At this time in history. No nation is truly 100% self sufficient. Mainly most nations over the last 50 years have not tried to be. So it can be seen as governments own choice.
But huge changes in the value of a currency has a huge negative effect on the ability for any nations citizen’s to thrive.
This not only effects the poor drematically. But often more to the worry of governments. The rich and government spending power overall.
The later is a death blow for democratic nations. But even more so for a nation that has been using its buying power to position itself in the world for decades. Such as China.