What can you say about Chinese equities that hasn’t already been said about Gaza? They’re bombed out and probably unrecoverable.

The Shanghai Composite trundled lower on Tuesday, hitting a new low for 2023 in the process.

As one netizen noted on social media, the gauge is down 15% from its highs in April, a period during which global equities rose 13%. The Nasdaq 100 is up 28% since then.

Over the weekend, I wrote that 2023 was “a year during which assets of all sorts notched respectable gains.” Commodities were an exception, but not the only one. Chinese assets, like the Chinese economy and the people who comprise it, labored in the long shadow of authoritarianism.

The SHCOMP is down 7% for the year, the CSI 300 14.5%. Just ahead of the long holiday weekend in Hong Kong, the authorities in Beijing undercut tech stocks with a new decree aimed at curbing online gaming addiction.

Although officials approved more than a 100 games on Monday (apparently in an effort to bolster market sentiment), every incremental broadside serves as a new reminder for investors that Xi’s vision for Chinese society, and particularly the extent to which the implementation of that vision tends to manifest in mercurial decrees, makes local equities a dicey proposition on good days and completely uninvestable on bad ones.

The chart above is simple, but poignant. Since early 2021, when Xi embarked on a societal overhaul originally dressed up as an anti-monopoly crusade, Mainland shares have been a lost cause.

Whatever you want to say about the merits of Xi’s “common prosperity” push, the opaque character of Chinese policymaking and the (well founded) suspicion that at the end of the day, no one who fashions himself a reincarnated Mao can possibly be friendly to capital, let alone foreign capital, made Chinese shares uninvestable for the better part of three entire years.

Recall that a key gauge of foreign direct investment in China turned negative in Q3 for the first time since at least 1998.

That suggests it’s not just Chinese equities that are uninvestable, but China itself.

Tuesday would’ve been Mao’s 130th birthday. Xi delivered a speech at the Great Hall of the People to mark the occasion.

“The complete reunification of our motherland is a righteous cause,” he declared. “Our motherland must be reunified and we firmly oppose anyone using any means to separate Taiwan from China.”

Taiwan holds elections on January 13.