DECRYPTION – Without explicitly admitting it, the rise of inequalities is taken very seriously by the Party, perceived as a threat to its legitimacy.
In China, the “Common prosperity”, President Xi Jinping’s new slogan, is giving the private sector a cold sweat. At a meeting of the Central Committee for Financial and Economic Affairs of the Party (CCFEA) on August 17, the head of state promised to“Adjust excessive income” in order to create a structure for the redistribution of wealth “Olive-shaped”. The Chinese number one also called the wealthiest and businesses to “Give more to society”.
In fear that the rich could become the target of another turn of the hand from Beijing, the shares of luxury groups LVMH and Kering fell around 10% the week following the Chinese leader’s announcement. Burberry and Richemont prices also eroded by 6%. A similar fall was recorded by car manufacturers Porsche and Ferrari.
Read alsoChinese billionaires have never gotten so rich
Zhang Weimin, professor of economics at Peking University, worries about excessive state intervention and erosion of the economy
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