This was supposed to be China’s year.

You can probably recite the investment case from memory. Xi Jinping finally abandoned “COVID zero,” setting the stage for a robust economic rebound. Crackdowns aimed at facilitating “common prosperity” were mostly complete, clearing the way for foreign investors to get excited about the nation’s assets again. And so on.

It was a good story. It was also naive in many ways, as Western narratives about China tend to be.

Fast forward five months and there’s no recovery to speak of. At best, the data is ambiguous. At worst, it’s plain old underwhelming and that assumes you believe it’s accurate, not the safest assumption in the world, to put it politely.

I won’t spend an inordinate amount of time recapitulating, but I did want to briefly mention that Chinese equities erased all of 2023’s gains on Wednesday after falling for a seventh session in eight.

The CSI 300 is now flat for what one local fund manager suggested may be a “grueling year.”

There are renewed worries over LGFV debt, although I don’t know why I say “renewed.” Like so many other concerns about the sustainability of China’s growth model, LGFV jitters are perennial. Every year, financial media outlets (mainstream and otherwise) feed you the same set of China economic doom narratives. It’s not that the narratives don’t have any merit (they most assuredly do), it’s that this year’s enthusiastic journos are unwittingly re-writing 2015’s China coverage, God bless ’em.

Anyway, some local government financing vehicles are apparently short on cash, and are now making payments in the evening, after the close of business. That’s obviously disconcerting for bondholders. (“Can you put your phone away while we’re having dinner please?” “No! The capital of Yunnan owes me money. I loaned them $140 million for sewage disposal last year, and it’s 5:07, which means… you know what? Never mind. Pass me that Kweichow Moutai.”)

Some readers might recall that the beleaguered Hang Seng Tech gauge, the poster child for Xi’s regulatory crackdown, was widely expected to lead a recovery in Chinese equities. That hasn’t panned out.

The gauge has now erased most of a delirious surge which began in November, and is underperforming America’s mighty mega-caps.

All of this is set against the ongoing deterioration in US-China relations, which escalated further this week when Beijing barred Micron, citing national security. That prompted calls on Capitol Hill for a response. TikTok, meanwhile, promised that Oracle will soon have full access to its source code, but US lawmakers aren’t likely to be swayed.

Finally, the yuan is trading with a 7-handle again, reflecting all of the issues mentioned above, plus a few more. Now tell me again about the dawn of Chinese hegemony.