In recent months, the Chinese government has embarked upon a regulatory tightening cycle unprecedented in terms of its duration, intensity, and scope. Regulations targeting specific sectors, including internet platforms, education and property markets, have wiped out more than $1tn of market cap from Chinese equities since their recent peak in mid-February. At the same time, President Xi Jinping has announced a new “common prosperity” agenda to promote more sustainable and equitable growth. As investors and observers try to wrap their heads around these regulatory and policy shifts, what they—and potential future actions—mean for the Chinese economy, its markets and beyond is Top of Mind.
To start answering these questions, we first turn to a number ofChina watchers, including GS’s Chief China Economist Hui Shan, Primavera Capital’s Fred Hu, Oxford University’s George Magnus, Tsinghua University’s David Li and CSIS’s Jude Blanchette, to better understand the government’s motivations, the forward-looking regulatory outlook and whether these developments mark a meaningful shift in the relationship between the government and the private sector/markets in China.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
