Version 1.0 — 2026-09-26
Executive summary
The Free China Movement proposes a household-prosperity strategy for mainland China that shifts the objective of economic policy from maximizing production and state-directed investment toward sustained growth in median household living standards, secure labor income, portable social protection, household asset ownership and transparent returns from public capital.
The policy deliberately does not adopt viral country rankings or a single target for “wages as a share of GDP.” Different datasets measure employee compensation, adjusted labor income, disposable household income and consumption. Targets should be set only from harmonized series with common definitions.
1. Measurement before targets
Create an independent statistical authority and publish a National Household Prosperity Dashboard covering: labor income share; median and mean disposable income; wage, business, property and transfer income; household consumption and saving; income quintiles; urban-rural and migrant-worker gaps; social-insurance coverage; household debt; and wage-arrears enforcement. Publish methods, revisions and machine-readable data.
Alongside it, publish a Public Capital Account covering each major SOE’s profits, retained earnings, dividends/remittances, state-capital injections, transfers to general budgets and ultimate uses. Public ownership should be auditable.
2. Immediate program: first 24 months
Wage enforcement: establish fast wage-claim procedures, traceable payroll records, escrow/payment bonds in high-risk contracting sectors, joint liability where appropriate, automatic interest on unjustified arrears, priority for unpaid wages in insolvency, and enforceable anti-retaliation protection.
Low- and middle-income relief: redesign taxes and employee contribution burdens so additional earnings translate into higher take-home income while preserving pension and health financing. Evaluate an earned-income credit or refundable low-income tax credit using transparent fiscal scoring.
Portable benefits: make core pension, health, unemployment and occupational records nationally portable and reduce hukou-based barriers to basic public services.
Household confidence: prioritize completion and lawful restructuring of distressed presold housing projects, protect household claims, and disclose local-government and developer liabilities.
3. Medium term: two to five years
Wage-setting institutions: require transparent regional minimum-wage reviews using median wages, productivity, employment conditions and cost of living. Protect genuine worker association and collective bargaining consistent with constitutional rights and independent law.
Fiscal rebalancing: subject industrial subsidies and capital projects to published cost-benefit tests. Redirect savings from low-return projects toward health, education, pensions, child support and unemployment protection where evidence shows higher household welfare.
Competition and private enterprise: end discriminatory access to credit, procurement, licenses and markets based on political ownership status. Protect private property and contracts through independent courts.
4. Public capital and SOE reform
Separate the state’s roles as regulator, owner and political authority. SOEs operating in competitive markets should face the same competition, disclosure, bankruptcy and governance rules as other firms. Natural-monopoly and strategic enterprises require independent regulation and transparent public-service obligations.
Create a professionally governed public-wealth framework for state equity. Require audited accounts, independent boards, published dividend policies and legislative oversight. A defined share of distributable public-capital returns should support broad citizen benefit rather than disappear into opaque institutional recycling.
5. Citizen/social-wealth dividend: design before percentage
FCM supports formal evaluation of a citizen dividend or social-wealth dividend, but Version 1.0 does not invent a payout percentage. The fiscal study must distinguish gross SOE profit from distributable profit, required reinvestment, debt obligations, pension liabilities and monopoly rents. It should compare direct cash dividends with pension, health, child-account and social-insurance funding.
The design should examine international experience—including direct resident dividends and sovereign/public investment funds—without assuming that Alaska, Norway, Singapore or any other model can simply be copied into mainland China.
6. Long-term objective
The objective is not mechanically to maximize labor’s accounting share. A healthy economy needs labor income, entrepreneurship, savings, investment and productive capital. The objective is to ensure that productivity growth produces broad and measurable gains in median disposable income and household wealth while preserving investment needed for future growth.
Long-term targets should therefore be adopted as a basket: real median disposable-income growth; labor-income share using an internationally harmonized definition; household consumption share; property-income participation across the distribution; poverty and income-distribution measures; benefit portability; and the proportion of public-capital returns demonstrably reaching public services or households.
7. Governance safeguards
All targets and transfers should be established by law, independently audited, published annually and subject to legislative review. No political party, ministry, SOE manager or security institution should control citizen eligibility or manipulate public-capital distributions for political loyalty.
8. What Version 1.0 does not claim
It does not endorse the viral claim that mainland Chinese wages equal 8% of GDP. It does not treat labor income as identical to take-home pay. It does not count retained SOE profits as household income. And it does not set international ranking tiers until the underlying series have been normalized for definition, year and sector coverage.
Evidence base
- NBS 2024 household survey: disposable-income composition and median/mean income.
- Ministry of Finance 2024 central state-capital final accounts: profit-remittance categories, remittance base, receipts and transfer to the general public budget.
- ILO/OECD, 2025 policy work on labor-income share, wage-setting institutions and collective bargaining.
- OECD household-disposable-income definitions.
- World Bank WDI household-consumption definitions and international series.
Version note: Version 1.0 is the baseline FCM proposal. Version 1.1 should add the harmonized international benchmark annex and fiscal simulations for alternative public-capital dividend designs; substantive changes must remain reconstructable rather than silently overwriting this baseline.