Inequality moves up the CPC’s agenda

China’s leadership has signalled a growing focus on reducing inequality. This could boost the productivity of low-income households and speed up the long-touted rebalancing toward consumption. But, if taken too far, it risks dampening the competitive pressures that are central to fostering innovation and economic efficiency. And even if the economy ends up benefiting overall, the “common prosperity” campaign is yet another reason to be cautious on the outlook for Chinese equities.