A-shares: Defaulting to Losses

This is very easy to understand. You can tell from whether they tax you or not. If you make money in international markets, capital gains are taxed—even your home country will ask for a cut of the capital gains you earn from trading in overseas markets.

What’s the subtext?

They’re defaulting to you making money before they ask for taxes.

Now look at our own market: do they tax your capital gains? No. They only collect stamp duty on transaction fees. That means the default assumption is you won’t make money.

To make it even clearer, they’ve recently introduced a specific term for us: “financial consumers.”