China Investors Learning How to Profit From Xi’s New Capitalism
- Slowest growth since 1990s leads to greater party intervention
- Green stocks rally shows following the state can be lucrative
A broadcast of President Xi Jinping speaking on March 5.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
Over the past year, President Xi Jinping has ended China’s days of limitless private sector-growth in favor of state-directed “common prosperity.” While that’s made life more difficult for investors, they are slowly learning how to cash in.
Before last year, owning shares of China’s fast-growing private enterprises proved a winning strategy. At its peak in February 2021, the MSCI China Index rose almost 380% since the depths of the global financial crisis, beating a benchmark of global equities by about 140 percentage points. Buying Chinese firms listed in the U.S. was even more profitable, with the Nasdaq Golden Dragon China Index rising more than 670% in the period.