Xi’s iron fist is hurting China’s economy

Mao Zedong had a big thing about contradictions. They were the basis of life, driving it forward, the old despot once mused. But even he might have struggled to understand today’s Communist party – which is desperately trying to drum up foreign investment while simultaneously hounding foreign companies out of the country.

The latest figures on inward investment will have made grim reading for the elderly leaders in Zhongnanhai, their compound in Beijing. Foreign investment fell to $20 billion in the first quarter of 2023, compared with $100 billion over the same time last year, according to the research firm Rhodium Group. This comes as the economic recovery following China’s reopening after Covid-19 is rapidly running out of steam. June exports fell 12.4 per cent year on year, youth unemployment at more than 20 per cent is at its highest level since China began publishing data in 2018, and analysts are scrambling to cut their growth forecasts.