Washington Post: China is building a new Great Wall | policy

The Washington Post believes in its editorial that China is moving towards an unprecedented tightening of its control over the movement of money, technology and human talent, in a move that reflects the Chinese leadership’s concern about the increasing economic challenges facing the country.

After the exodus of capital estimated at about one trillion dollars over the past year – according to the editorial – the authorities in Beijing were quick to impose a new set of restrictions aimed at limiting foreign investments by Chinese citizens and companies, in an attempt to stop the bleeding of money and preserve financial resources within the country.

These measures come at a time when the Chinese economy is facing a noticeable slowdown in growth, in addition to the continuing real estate market crisis and the worsening debt of local governments, which has prompted many people with savings to search for safer and more profitable investment opportunities outside China, whether by purchasing real estate and foreign stocks or investing in international insurance products.

The Chinese government saw the continuation of this trend as a threat to financial and economic stability, and therefore it chose to “build the Great Wall again” – according to the newspaper’s pun – by tightening supervision instead of addressing the structural reasons that push investors to move their money abroad.

Beijing believes that these steps are necessary to preserve the country’s financial and technical resources and enhance its competitiveness, especially in the fields of advanced technology and artificial intelligence.

In this context, the article cited the Chinese authorities’ decision to oblige Meta to retract its acquisition of the emerging artificial intelligence company Manos, which transferred part of its operations to Singapore.

However, critics of these policies warn that they may lead to counterproductive results, by reducing startups’ opportunities to obtain international financing, weakening the innovation environment, and pushing investors to search for alternative means of moving their money abroad.

The article concludes that strong economies do not flourish through isolation or tight restrictions, but rather through openness and the flow of ideas, funds, and competencies towards the most innovative and productive projects.

Therefore, the article believes that the new policies pursued by Beijing, although they may achieve some short-term gains in reducing capital outflow, may in the long term lead to weakening innovation and deepening China’s isolation from the global economy, which may impose greater challenges on its economic and technological ambitions in the coming years.