The Economist on Xi Jinping's "grip" on the economy

[The value of China's and Hong Kong's equities are down nearly $7 trillion since their peak in 2021, a fall of about 35%.  Since that time, the U.S. and India are up 14% and 60% respectively.]

On January 22 India briefly overtook [Hong Kong] to become the world's fourth-biggest stockmarket...  Most worrying of all is that investors on the mainland are losing confidence...  Investors trapped in the mainland may have little choice but to put some of their hard-earned cash into stocks.  Foreigners, by contrast, may be harder to tempt back.

[...]

The implicit understanding was that, whatever China's politics, its officials could be trusted to steer the economy towards prosperity...  Mr Xi seems to know that something is going wrong.  In addition to sacking [top securities regulator] Mr Yi, the government has curbed short-selling, and state-owned asset managers have been ordered to buy stocks.  This may prop up stock prices for a time.  But such meddling only [belies] China's mistrust of markets, underlining why investors left.

[...]

In January the central bank declined to cut interest rates, despite continued deflation, catching out markets.  All of this serves only to frighten investors...  The real obstacle to change is Mr Xi's firm belief that he and the Communist Party must be in total control.  Regaining investors' trust requires a rethink of the state's role in the economy.  But Mr Xi is unlikely to soften his grip.

~ "Who's in control? Why investors are losing faith in Xi Jinping," The Economist, February 10, 2024