Doing business in and with China – never easy – has become much more complicated, volatile and controversial. In 2017 Xi Jinping declared that China had entered a “new era”, in which “Xi Jinping Thought on Socialist Economy with Chinese Characteristics” would be the sole guiding principle for financial and economic decision-making. “Xiconomics”, for short. In 2020 Xi Jinping announced Dual Circulation Strategy as China's new development pattern, with the priority on China's domestic economy. Business too had entered a new era.

Until recently multinational companies had enjoyed rapid growth and profits in many sectors of the Chinese economy. They did this by adapting to the local context, providing products that Chinese consumers value and demonstrating to the government how their operations supported China's development. This was all part of China's increasing integration in the world economy. What mattered much less was the ideology of the Communist Party of China (CPC), questions of national security and, indeed, in which country a multinational was headquartered. To the extent that shareholders and governments back at home had a view, they supported expansion in China.

Much has now changed in this world. The China context too has transformed. China remains the world's largest market in sector after sector and is the world leader in renewables, electric vehicles and digitization. But the business environment is more uncertain – and, especially for those who have faced Covid-19 travel bans – more opaque. Business leaders now need to know how Party ideology and national security fit into China's economic ambitions. Xi Jinping's leadership pervades all questions of policy and business climate. Geopolitical tensions increase the complexity. Governments, investors, customers and employees outside China no longer automatically support investment in China. Doing more business in China can cause problems back at home, but many multinationals earn sizeable revenues and profit in China. They see further growth potential, while developing alternatives to China takes time and effort even where it is an option.

Uncertainties abound. At the time of writing it is hard to disentangle the economic impact of Covid-19 lockdowns from more deep-seated problems in the real estate sector and elsewhere. At the 20th Party Congress, held in October 2022, Xi Jinping was officially confirmed in his third term as leader.