Much as Chinese regulators and Citigroup might prefer to sweep the past week’s events under the rug, there is no avoiding the sense that a Rubicon has been crossed in China’s relations with foreign investors. Months from now, analysts will likely look back and circle an inflection point on their charts while academics will be engaged in endless debates over how far Chinese policy on the use of capital has shifted. It might take a bit longer for historians, but they will surely soon start drafting treatises about the moment Xi Jinping redefined Socialism With Chinese Characteristics.
Neither the Party leadership nor the foreign investment community are likely to come off well in accounts of this time. Both have looked past each other, failed to grasp contrasting viewpoints, misunderstood meanings, and misread intentions.
A more cynical view might say that they have not; that this is the way the money dance is done. They understand each other, but engage in public theatrics to secure and press their relative advantages.
Regardless, what happened is worth examining at face value.Continue reading No turning back on foreign investment policy change