What is Common Prosperity?

TS Lombard has a crack at it:

The mantra of “Common prosperity for all”, proclaimed by Xi Jinping in more than 60speeches this year, is an ideologically appropriate slogan for a Communist Party after decades of lop-sided growth and rising inequality. The promise of greater fairness, re-balancing between labour and capital, increased social provision is calculated to win popular support, and head off discontent as China’s growth rate slows. The promise is that the less well-off will be better catered for and small enterprises protected as the rich are required to contribute more to society and big business is more tightly regulated.

Defined by the Central Committee for Financial and Economic Affairs as “an essential requirement of socialism and a key feature of Chinese-style modernization”, the new course and its ramifications for companies and investors is the logical outcome of the evolution of China’s governing structure over the past decade under the Xi Jinping leadership. This has seen relentless political tightening, a heightened focus on national security and a more assertive foreign policy. It is now being rolled out in the new economic model which is set to be a hallmark of the next five-yearly Communist PartyCongress late next year and on into Xi’s third term, implementing a radical re-orientation from the model set in train by the market-oriented reforms of the post-Mao era.

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