ANALYSIS: CCP’s Heavy-Handed Approach Speeds Foreign Investment’s Flight From China

Record outflow of capital after raids, expanded anti-espionage law

The closed office of the Mintz Group are seen in an office building in Beijing on March 24, 2023. Five Chinese employees at the Beijing office of the due diligence firm were detained by authorities, the company said. Photo by Greg Baker / AFP

As China’s economy continues to decline, Chinese authorities have adopted a heavy-handed approach to “regulating” foreign companies in recent weeks. The tactics have chilled foreign investment in China and triggered a massive capital outflow.

Meanwhile, China’s premier effusively welcomed global executives at the China Development Forum in late March. The contradictory moves—simultaneously welcoming and distrustful—highlighted the ambivalence of the Chinese Communist Party (CCP) and its “struggle philosophy,” say experts.