China Decoupling from West?
A Guest Column by Robert Greenfield
In recent weeks, five major Chinese state-owned companies are delisting from the New York Stock Exchange (NYSE). Is this part of China's retreat from the West now that they have raised the capital and no longer want oversight or need western money? Or is it part of the USA delisting companies who cannot meet regulatory requirements?
What would be the implications of China decoupling from the West, specifically the United States?
The companies -- China Life Insurance, oil giant Sinopec, PetroChina, Aluminum Corporation of China (Chalco) and a separate Sinopec entity, Sinopec Shanghai Petrochemical will leave the NYSE. The policies begun some 50 years ago to link the fates of Western and Chinese economies are becoming undone.
What does this mean for the bigger picture of international relations and a world without military conflict between global powers? Consider:
Taiwan is all but blockaded now by China. Not a big deal? How about all those advance computer chips only made in Taiwan, nowhere else. China is practicing for the day the invasion will come.
Hong Kong:Â some 115,000 people emigrated from Hong Kong in the past year. With a population over 7.5 million, is that significant? Perhaps not until one looks beneath the surface and discovers that it is people with money and education. Of course, Hong Kong is not the same. The bigger question is how long can Hong Kong banking be trusted as it becomes a smaller and smaller satellite city of China?
DIDI and others have delisted from the NYSE taking their billions with them. Now these five who raised all their money in the USA--perhaps up to 100 billion--and it has now gone back to China, effectively taking their money out of the global banking and specifically U.S. system.
COVID lockdowns effectively mean very few people arriving in and exiting out of China for almost three years. This means a society of over 1.4 billion people have little contact with those outside their sphere, and specifically the West. And that society is told daily that the West and the USA are trying to harm them. The West and USA are reported to deny the Han Chinese everything they have worked so hard for. The constant reporting is that the Han Chinese are the best, the smartest, the brightest, and the strongest people in history. The United States and Western allies together are responsible for more than 100 years of shame. It is surprising to visitors of China to see a completely different version of history on Chinese television. To cite a few examples: China won WWII, Japan is a horrible place, the West tried to dismember China, the USA is trying to surround China, China deserves and owns the South China Sea-- even thousands of kilometers away from the mainland.
The de-listing, under the flag of regulatory compliance or perhaps conflict between Western financial transparency regulation and China state-secret laws, is in effect a way to further remove China from the global economic system. This plays to the nationalist tendencies and anti-global trade constituencies in the West. The risk is if the world is breaking into separate financial spheres, there are many opportunities for miscalculation and further conflict. Global investors, including behemoths like Goldman Sachs or just any person with a belief in China’s role in an interconnected world, will struggle mightily to pretend China isn’t falling apart.
But China is prepared, so watch closely. Soon, China will not be dependent on the West for any essentials – including capital, technology, and commodities with few exceptions, e.g., iron ore from Australia.
China has been methodically preparing to garner these essentials from its vast array of economic colonies in Asia, Africa, and South America. And, of course, it’s biggest commodity-producing colony--Russia.
Robert Greenfield is a contributing guest columnist to The Common Bridge. Do you have a column or opinion you’d like published? Contact editor@thecommonbridge.com