"How is killing off the population and scarring away foreigners useful?"
Here is one possible reason. The blue line below is China's government+private debt and the orange line is China's GDP - which is unsustainable and heading for a major crisis. This problem is exacerbated by the one child policy which is about to deliver twice as many old and sick people as taxpaying working people.
Now, what would happen to those two lines if China invented a way of deleting all the old and sick people from the economy while leaving the young and the productive workers in place? The GDP line would go up due to more productivity and more discretionary spending and the Debt line would go down due to less welfare costs and more inheritance. Also, the one child policy problem will be eliminated.
