At a press conference held in Hangzhou, capital of Zhejiang province, on Sept 18, Meng Gang, director of the Zhejiang Commission of Development and Reform, gave a presentation on the province's proposal to narrow its residential income gap as a necessary means of achieving common prosperity.

"A key indicator for Zhejiang's efforts to form an olive-shaped social structure, in which middle-income households are the mainstay of the economy, is that we are aiming to have 80 percent of the province's households have an annual disposable income standing between 100,000 yuan ($15,460) and 500,000 yuan, and 45 percent of the province's households have an annual disposable income of between 200,000 yuan and 600,000 yuan by 2025," said Meng.

Meng noted that Zhejiang authorities have to adhere to four principles as part of their efforts to narrow the residential income gap. 

The first principle is to integrate the determination of market forces with government regulation. Zhejiang will give market force full play in resource allocation, as well as enhance the regulatory role of the government in income distribution.

The second principle is to achieve a balance between improving efficiency and advocating for equity. Zhejiang will explore building basic institutional arrangements for the coordination of primary distribution, redistribution, and tertiary distribution so that a reasonable distribution of income takes place.

The third principle is to increase income and reduce expenditures. Zhejiang will strive to raise residents' incomes through multiple channels, as well as motivate them to cut unreasonable spending in education and housing.

The fourth principle is moderation. Zhejiang will improve its residents' welfare to the extent that its economic development and financial affordability is sustained.