July 29, 2021
A capitalist system would use taxes and other incentives to prod companies to change behavior. In Xi’s China, it seems there’s less a strategy to raise its corporate game than official caprice taking out billionaires who attained too much power and influence.
As his dragnet extends from tech to property to food delivery to education, investors are thinking more about which sector is in trouble next more than focusing on China’s rapid growth.
The cumulative effect of the moves of recent months is more than $1 trillion of losses at times in just tech and education stocks since February. That has the Hang Seng Tech Index over in Hong Kong reeling, too.
Beijing’s scattershot approach in hitting some of the economy’s most vibrant sectors risks repelling foreign investors—a group China claimed to be courting. The upshot could be an exodus of foreign capital as investors lose trust in Xiconomics.
It’s hard not to conclude that Xi has decided capitalism just isn’t for China. The country’s leadership is effectively nationalizing certain thriving sectors—or leaping in that direction—and dictating what can be done with profits.
Edited by：【Himalaya London Club UK】
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