China Common Prosperity – a revolution in our times

Shared prosperity is for real in China. The coherence between the fragmented state interventions we have already seen and the policy of “Common Prosperity” are proof of it. Common prosperity will limit return on capital, reduce Gini coefficients and give the state an expanded role in the Chinese economy going forward. That does not make China un-investable. But it means assessing investments must include the risks to returns from the new policy (higher discount rates for equity profits etc.). Common Prosperity will make China less of a disinflationary force in world markets than in the time of globalisation.

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