An unpredictable and unreasonable clampdown on some products and even whole sectors in the mainland is sending a strong signal to foreign investors: investing in China has now become extremely risky.
It's like holding cryptocurrencies; you can lose everything in a single night.
The message is crystal clear to outsiders.
Here, investment refers not only to the financial ones like listed stocks, but more importantly to a whole business.
For you might lose money on some stocks in your portfolio, but if you are an entrepreneur, the loss of your business can well mean you lose everything you have.
Those who are already in a Cold War rivalry with China can be better shielded from both present and future losses because they have already cut back on their investments in this part of the world.
Chart one shows foreign direct investments coming in from the United States.
China also has similar datasets but you know what's funny about them - numbers may decline yet the growth is still positive.
A US downtrend in FDI in the mainland and Hong Kong has been observable since 2014 or 2016, which is earlier than indicated by the arrow. The latest net flows are negative for both.
A broader dataset that goes back further is available from the United Nations, where inflows, outflows and net flows of FDI to both the mainland and Hong Kong are reported.
We have combined the figures for both places in chart two.
Two trends stand out.
One is that the uptrend for both inflows and outflows have flattened out since 2014, the year that Occupy Central with Love and Peace sit-ins began here and two years since President Xi Jinping has been in power.
The second is that net inflows have been declining since 2006, the year that is widely regarded as the brightest year for China.
The trend has been there for a long time.
That is because as everyone knows, there is no harm in imposing whatever constraints on anyone, any company or even any sector as one wishes.
Law Ka-chung has worked in the financial industry and the government for two decades. Reach him at facebook.com/kachung.law.988 or lawkachung@gmail.com
