hISTORY eNDS EVERYWHERE:

Foreign direct investment is calculated to have fallen to U.S.$20 billion in the first quarter of this year, compared with $100 billion in last year's first quarter, when China was in lockdown, according to The Wall Street Journal.  

Initial bounce-back growth in the aftermath of long lockdowns due to COVID-19 is fading as consumers draw back from spending and exports slump. Compounding the pinch is the slow collapse of China's all-important real estate sector as well as the ongoing problem of accumulated local-government debt.

Beijing has stated it has no money to bail out local government debt due to overspending on COVID-19 mitigation. A massive infrastructure spending spree on the heels of the Great Financial Crisis of 2008 saw the construction of roads to nowhere, ghost cities, unoccupied tower blocks and unfinished theme parks.

Local governments have to deal with a debt hangover from years of profligate spending compounded by what is believed to be an 18% jump in health expenditure during COVID-19 and a 23% fall in revenue due to the real estate sector slump.

In the meantime, 2023 was supposed to be the "Year of Investing in China," as Beijing has hailed it, but foreign investors aren't buying it, not least because President Xi Jinping's administration has shown every sign of being determined to make it harder to do business in China, not easier.

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