What China’s Odyssey Towards “Common Prosperity” Means for Portfolios

China’s regulatory crackdown focuses on specific sectors. Market volatility will likely be temporary, and long-run prospects for active investors remain robust.

In February, China declared victory in lifting its entire population out of extreme poverty. Now it’s made distribution of income a priority.

The call for “common prosperity” is not new: Since the 19th National Congress of the Communist Party of China in 2017, the government has shifted focus from “growth first” to “quality first”, aiming to balance economic growth and sustainable development, with “social fairness” as a key focus. However, progress has been delayed by the U.S.-China trade dispute in 2018-2019, and then by the COVID-19 outbreak.

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The Author

Carol Liao

China Economist

Stephen Chang

Portfolio Manager, Asia



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