Entrepreneurial capitalism in China faces a bleak future

In May 2022, Chinese Vice Premier Liu He pointed out The government’s intention is to end the campaign of “regulatory correction” – a set of regulations imposed on the education, ride-sharing and technology sectors.

He’s the chief economic adviser to Chinese President Xi Jinping — so his message must have been agreed by Xi, who appears to have finally woken up to the damage the year-long crackdown has done on investor sentiment.

Heng Seng fell 23.7% between December 2020 and mid-May 2022, a result that is partly explained by strict regulatory actions. While the worst seems to be over, the deeper problems the campaign has caused remain unresolved.