Big business left choking on President Xi’s dogma

Foreign companies wake up to a Chinese nightmare as economic and geopolitical tensions rise

China is choking on President Xi Jinping’s domestic dogma. So is the rest of the world.

Unpalatable soundbites have left Beijing staring into a PR abyss. 

It comes after the pro-democracy crackdown in Hong Kong two years ago and the internment of at least one million Uyghur Muslims in reeducation camps

Unprecedented military bullying of Taiwan and aggressive moves against neighbors in the South China Sea have only inflamed the situation.

Alarmed by the “ideology” spouted by Comrade Xi and the ruling Communist Party, the democratic community has finally realized the threats posed by Beijing are real.

Even big business has suffered a crisis of “confidence” from the trickle-down effect of China’s policies as the world’s second-largest economy tanks.

“While in the past Beijing’s reform agenda helped to ensure stability, propel economic growth and facilitate inflows of foreign direct investment, now ideology is trumping the economy,” a key report released by the European Union Chamber of Commerce warned this week.

Between the lines:

  • The white paper highlights growing disenchantment with Xi’s hardline doctrine.
  • His botched “zero-Covid” strategy has left the economy on life-support with a continuous round of flash lockdowns.
  • A property sector meltdown, a mountain of local government debt, and fears of turmoil in the banking industry have only added to the toxic atmosphere hanging over China.  
  • Finally, EU countries are waking up to Xi’s “doublespeak.”

We cannot allow ourselves to be blackmailed [by China].

Robert Habeck, Germany’s Economy Minister

What was said: “Investment into the country is unlikely to increase while China keeps its doors closed and companies perceive political, economic and reputational risks to be mounting,” Jörg Wuttke, the president of the EU Chamber of Commerce in China, stressed. 

Delve deeper: Last week, Germany’s Vice-Chancellor Robert Habeck ripped into what he called the nation’s “naivety” when dealing with China. “We cannot allow ourselves to be blackmailed,” he told the Reuters news agency amid a broader EU pushback.

Political reaction: Beijing was not amused. “We hope that Habeck [can] earnestly respect laws, instead of driving ‘chariots’ on a rampage with ideological and confrontational thinking. This is not good for anyone,” state-run Global Times said in a commentary. 

Big picture: Concerns are growing that China is closing in on itself as the xenophobic drumbeat of nationalism grows loader. 

From bad to worse: “China’s catastrophic handling of surges in Covid-19 cases signals that it is turning inward, with worrying implications for global peace and prosperity. Yet bad as this inward turn is for the world, it will be even worse for China,” Ezekiel Emanuel, of the University of Pennsylvania, said, referring to Xi’s “zero-Covid” policy.

International fallout: “Geopolitically, China’s turn inward means it will endeavor to showcase its accomplishments and belittle the West … we can also expect rising tensions over Taiwan, multiple tiny islands claimed by Japan, Taiwan and China, and other faultlines,” Emanuel wrote in a commentary for the Financial Times earlier this month.

China Factor comment: Chairman of Everything Xi is unlikely to change course. Instead, he looks certain to double down on the nationalistic narrative that this is “China’s Century.” 

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