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Could China’s President Be Good for Luxury?

Xi Jinping’s speech on ‘common prosperity’ was not a declaration of war on wealth but an acknowledgement that wealth is concentrated in too few hands. A larger middle class could actually create revenue opportunities at entry level prices for luxury brands.
Chinese President Xi Jinping's emphasis on 'common prosperity' sent luxury shares down, but a larger middle class could create revenue opportunities at entry level prices for luxury brands. Getty Images.
Chinese President Xi Jinping's emphasis on 'common prosperity' sent luxury shares down, but a larger middle class could create revenue opportunities at entry level prices for luxury brands. Getty Images.
By
BoF PROFESSIONAL

Chinese President Xi Jinping’s speech stressing the idea of “common prosperity” at a meeting of the country’s Central Committee for Financial and Economic Affairs this month spooked luxury investors, resulting in an estimated $120 billion being wiped off luxury goods company market capitalisations. Investors were rattled by Xi’s desire to curb “excessive incomes,” the prospect of new taxes on China’s rich and what this could mean for luxury’s most important market.

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