On April 16, 2022, the Macro-Finance Salon (No. 181) was held online and live-streamed. This event was co-hosted by the IMI, and the Department of Monetary Finance, School of Finance, RUC. The online seminar was the 24th session of the series entitled “Finance Propels the Opening of the Fourteenth Five-Year Plan”. The theme of the salon was “Role of Finance in Achieving Common Prosperity”.

Luo Yu, Deputy Secretary of the CPC Committee and Associate Professor of the School of Finance, RUC, delivered a keynote at the seminar. Participating in the salon were Gao Xingwei, Associate Professor of Department of Economics, Party School of the CPC Central Committee (National Academy of Governance); Li Xunlei, Chief Economist of Zhongtai Securities and Vice-Chairman of Council, China Chief Economist Forum; Wang Guogang, Member of Academic Committee, CASS and Professor of the School of Finance, RUC; and Yang Tao, Deputy Director of National Institution for Finance & Development. The Salon was moderated by Tu Yonghong, IMI Deputy Director and Dean of Yangtze River Economic Zone Research Institute, RUC.

Luo Yu proposed that the “Role of Finance in Achieving Common Prosperity” is threefold. First, the fundamental role of finance is to allocate resources so that income and wealth can be increased. Second, finance is generally regarded as an industry that despises the poor and curries favor with the rich, and therefore is not directly associated with common prosperity. Third, the financial sector enjoys an absolute advantage in income distribution. Research shows that the financial sector helps narrow the income gap and hence plays an indirect and ambiguous role in realizing common prosperity. However, the sector can play a direct and explicit role in expanding the wealth divide without proper regulation. It should be noted that the analysis of finance’s influence on common prosperity should be set in the context of certain social systems. In a socialist country like China, the financial industry eventually serves the fundamental interests of the overwhelming majority of the Chinese. Finance can facilitate common prosperity if redistribution can be optimized, financial inclusion, especially digital financial inclusion, can be advanced, financial empowerment can be boosted, and risk protection mechanisms can be provided. Financial policies should particularly protect people’s purchasing power and restrict the phenomenon of financialization. Furthermore, it is necessary to foster sound social values and avoid the prevalence of speculation and Mammonism when the financial industry is booming.