Then came the Covid. China lockdown. Everything was a mess. Companies that like to do business in China have learned that they want to source elsewhere as well. China’s economy was not developing as much as before. And investors have grown bitter.
Now China them back. No more closures, they tell foreign corporations and fund managers.
In an April 6 article in The Economist, we learned that foreign investors are “pouring in” to China after the Covid outbreak. These were basically portfolio investments.
Chinese leaders are asking global investors for their ridiculous Zero Covid policy and are looking to revive the romance. You know, the one that made them all salivate with the concept of promoting to Chinese consumers, not to mention making widgets there at discounted prices. Then you can sell us with a profit margin of one hundred percent.
At the event, Li Qiang, Xi Jinping’s newly promoted deputy, stepped up reform and opening up new markets to foreigners. A reading from the Boao Forum told attendees that “China will open its doors even more broadly to the world” and invites investors. to “share more the dividends of China’s opening-up and development. “
But times have changed. China is now perceived as a genuine enemy in Washington. Companies walk a tightrope. Such remote ties were the norm in the Obama/Biden years. They are the norm in the Biden/Harris years.
Here is a plan for the Chinese Communist Party to recruit tough entities in the US. The U. S. government will work on its behalf and get even more flexible lobbying from Wall Street and global corporations.
Ready for that?
Here it is:
Most of those corporations either manufacture everything in China or get a significant portion of their source of income from Chinese consumers. Why not give those other people the ability to invest in the company they do things for, or pay to attend the amusement park and the movies?This is the elevator speech.
Try to believe this offer.
Mr. Cook, do you need millions of retail investors who can’t invest in Apple’s inventory here?How much money do you think you can make from that?
Only a few registered Chinese investors can invest in the U. S. inventory market. UU. Si Apple were indexed in Hong Kong, it would open the market to new shareholders and capital; falling from heaven like manna from heaven.
Hong Kong would be the first to propose.
Hong Kong is not what it is since a Beijing security law engulfed the once-autonomous city. [ ] (Photo via DALE DE LA REY/AFP via Getty Images)
The table is already set. On March 31, 2021, the Hong Kong Stock Exchange published its consultation paper on reforms allowing foreigners to list shares. The findings were published on November 19, 2021 and the new regulations went into effect in January 2022.
Clearly, corporate America hasn’t budged. Maybe they weren’t asked. Maybe they think it’s too risky, given the political climate (they’d be right about that).
China takes the bait into the water and sees if any of the 3 big China-centric corporations bite. There is a possibility that Beijing already suspects that this would complicate things for those corporations and possibly would not present it.
But if they did, heads would explode in Washington, D. C.
If Washington needs to make it harder for U. S. corporations to do so. reject their policies towards China, they must play that scenario. Because if China needed an even bigger best friend in the U. S. of retail investors is one way to achieve this. Once indexed on a Chinese stock exchange, the risk of a forced delisting through Beijing would make them staunch allies of China, anything Washington can do without.
China would have Washington’s top hard-line capital-market policies surrounded, so to speak, by U. S. corporations silently begging D. C. that does not ruin its percentage value in China.
If China ever succeeds in this, it would be the evil genius stroke of the decade for the CCP.