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Anjani Trivedi

Making Sense of Xi’s New Common Prosperity Doctrine

Building a modern supply chain and growing China’s middle class is one thing, but investors worry this crackdown is also in danger of stifling innovation.

Xi is aiming to grow China’s middle class.

Xi is aiming to grow China’s middle class.

Photographer: Qilai Shen/Bloomberg

Investors are desperately trying to decrypt Beijing’s “common prosperity” proclamation — an attempt to create an “olive-shaped social structure” — to understand what the real-world implications will be. They only have to look to the last 15 years: It’ll be more of the same.

Zhejiang province, officially chosen as the “demonstration zone” to showcase this priority, is a good example. The region on the east coast of China that’s home to tech giant Alibaba Group Holding Ltd. is also the base for the country’s most high-tech businesses, with more than 100,000 industrial robots. Last year, its industrial value-add was expected to hit over $350 billion. The region is also a manufacturing center for chemicals and machinery and accounts for over 10% of the nation’s exports. Its government has committed to build 120,000 5G base stations, or almost 20% of those across the country, which is core infrastructure for next generation industry. Zhejiang isn’t just a rich, tech hub.