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Chinese President Xi Jinping speaking via video link at the annual meeting of the World Economic Forum © AFP via Getty Images

China’s drive for ‘common prosperity’ is not a pursuit of egalitarianism, President Xi Jinping has said in a rare international defense of the policy that rocked markets from Hong Kong to New York last year .

Xi, who many perceive as China’s most powerful leader since Mao, was speaking via video link at the annual meeting of the World Economic Forum – which was held online this year, rather than at the Swiss alpine resort from Davos.

“The common prosperity we desire is not egalitarianism,” Xi said. “We will first enlarge the pie and then divide it properly through reasonable institutional arrangements. As a rising tide lifts all boats, everyone will receive a fair share of development and development gains will benefit all of our peoples in a more substantial and equitable way.

As part of this policy, led by Xi, the Chinese Communist Party reshaped the country’s business and cultural landscape through a series of crackdowns that lasted for months. This has targeted industries such as fintech, education, and entertainment, as well as perceived societal ills such as celebrity culture, gaming, and girlish fashion trends.

These measures, which have caused the loss of billions of dollars for Chinese and foreign investors, have triggered an international debate on the political and economic motives of this policy and made the future of investment in China uncertain.

Xi tried to allay some concerns, insisting to the Davos audience that China remained committed to opening up to foreign businesses.

“All types of capital are welcome to operate in China, abide by laws and regulations, and play a positive role in a country’s development.”

The speech comes as China faces criticism for the erosion of democratic freedoms in Hong Kong and the treatment of Uyghurs in Xinjiang as well as expansive military postures. In response, Beijing regularly criticizes the United States and its allies and partners for interfering in China’s domestic interests.

The Chinese president warned of “serious negative fallout” if “major economies hold back or reverse course in their monetary policies” as the world grapples with accelerating inflation.

Problems with industrial supply chains, tight energy supplies and rising commodity prices pose challenges, he warned. “These risks are escalating and increasing uncertainty about the economic recovery,” he said.

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