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Xi Jinping, China's leader, took the other members of his new Politburo standing committee to Shanghai on Tuesday. They did not visit the stock market or other monuments to economic reform, but instead toured historical sites redolent of the founding principles of the Communist party.
Strangely, though, the visit is helping investors derive reliable themes from hundreds of policy signals that Mr Xi gave during a three and half hour Congress address last week. The common denominator, analysts said, is that Beijing intends to narrow social inequalities and give people a better life. The key phrase in Mr Xi's speech, says Shen Jianguang, chief economist at Mizuho Securities, was his call for China to address unbalanced and inadequate development and the people's ever-growing needs for a better life.
The exhortation is set to intensify efforts to close a yawning income gap, partly by improving the lot of an often poor, rural population of some 680 million people. Improved healthcare, bolstered by better insurance coverage in rural and urban areas, is set to buttress such efforts.
The environment is another key. Mr Xi called in his speech to treat the environment as we treat our own lives. And he mentioned the word 'green' 15 times, up from just once during the speech by his predecessor five years ago, noted Karine Hirn, partner at East Capital Asset Management in Hong Kong.
Investors pre-empted the popularity of the environment and the healthcare theme, propelling an 11.2% surge in the Asia CSI Environmental Protection Index and a 7.9% increase in the CSI HealthCare Index since the start of August. These compare with a 2.9% fall in the benchmark CSI All Share Index.
The trick now, analysts said, will be to find companies that benefit from such tailwinds while remaining insulated from the potential headwinds in Beijing's rebalancing intent. Shrinking a property bubble, reducing financial leverage, and rationalising state-owned industries, especially those that pollute the atmosphere, are all clearly in Mr Xi's sights.
