China’s financial landscape is showing signs of both resilience and vulnerability. Foreign capital, which had previously been hesitant to invest in the country, is now flowing back into Chinese equities. This surge is notable, with offshore inflows increasing by over 400% in the January-October period according to the Institute of International Finance. However, this apparent strength is being offset by underlying economic weaknesses.
Despite this, confidence in China’s leadership is growing among international investors, with many believing the country will continue to rise as a global superpower. Rana Foroohar of the Financial Times has expressed skepticism about this narrative, pointing out that the Chinese economic model is not equipped to lead the world. Her argument is supported by the flatlining of the Chinese economy, which has been exacerbated by an over-investment in property and infrastructure.
Xi Jinping’s policies are under scrutiny for their long-term viability. The Fourth Plenum’s 15th Five-Year Plan outlines a vision for