Stock Infographics

China is returning to a state-run collective economy.

Publish date: Wed, 02 Nov 2022, 01:58 PM
Visual content on financial market and investment trends

China is reviving state sales and marketing co-ops (供销社), a Mao-era institution that once functioned as a pillar of the socialist command economy

What is that?

In short, it's a supply chain system where the government will be responsible for supplying daily necessities to the people instead of having a commercial supermarket.

This is a return to the state-run collective economy. It's pretty scary and the government may not want a free economy and would like to reduce the number of private companies.

On the bright side, maybe the China government just wants to use it as a fall-back logistics and supply system to ensure emergency preparedness and food security in the event of worsening relations and further economic decoupling with the rest of the world.

Nevertheless, things may get worse for China market. The current low valuation may be a value trap.


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