How China could narrow a tech hub’s income gap – and avoid Silicon Valley’s fate

South China Morning Post · Mar 1, 2026 · Collected from RSS

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Ahead of China’s annual legislative meetings – typically a window into Beijing’s top-level policy agenda – this is the third entry in a series examining the complex economic recalibration driving China’s growth philosophy and its wide-ranging implications for local governments, financial investors and private enterprises.In China’s eastern province of Zhejiang, a sprawling laboratory for Beijing’s “common prosperity” campaign to reduce income inequality, statistics suggest success: between 2021 and 2025, its urban-rural income gap narrowed from a ratio of 1.96 to 1.81 – a rare feat of compression during an era of surging technological growth.But as Zhejiang – home to tech giant Alibaba, which owns the South China Morning Post, and upstarts DeepSeek and Unitree Robotics – becomes a hub for China’s advanced manufacturing and digital economy, a harder question is emerging: can it avoid the fate of Silicon Valley, where historic wealth creation coexists with stark inequality?Local authorities are hoping to resolve this thorny contradiction through sustained application of policy.The provincial government has mandated that by 2030, the gap between city and countryside incomes “keeps shrinking further” based on the progress achieved in the past five years, while both per capita gross domestic product and average income reach levels “close to” those in developed economies, according to a draft plan released this month.Having long been one of the few places in the country where rural residents enjoy relatively strong living standards despite the national urban-rural divide, Zhejiang was designated as a demonstration zone in 2021 to pursue President Xi Jinping’s “common prosperity” goal.