CHINAMacroReporter

'Western companies in China succumb to Stockholm syndrome'

‘Senator Marco Rubio of Florida has a point when he calls Delta Air Lines “the height of hypocrisy” for opposing voter legislation in the US state of Georgia while partnering with a government he accuses of being “actively engaged in genocide” in Xinjiang.’
by

Jamil Anderlini | Financial Times

|

Financial Times

May 5, 2021
'Western companies in China succumb to Stockholm syndrome'
BIG IDEA | ‘Senator Marco Rubio of Florida has a point when he calls Delta Air Lines “the height of hypocrisy” for opposing voter legislation in the US state of Georgia while partnering with a government he accuses of being “actively engaged in genocide” in Xinjiang.’

‘Stockholm syndrome, named after a notorious robbery in the Swedish capital in 1973, is a phenomenon in which the victim of kidnapping or hostage-taking develops feelings of trust, affection or sympathy for their captor.’

  • ‘It is a condition that afflicts much of the corporate world and some governments when it comes to their dealings with the Chinese Communist party.’

‘I was recently invited by a group of Hong Kong-based international business executives to discuss Beijing’s moves to crush the last vestiges of democracy and free speech in the territory.’

  • ‘Several of these executives from democratic societies said they viewed the free press as their greatest enemy.’

‘To them the problem was not the erosion of rights and freedoms in what was one of the world’s most dynamic financial centres.’

  • ‘The problem was pesky journalists who dared to report on these developments, thereby convincing head office to stop investing in the city.’

‘It may sound strange to describe successful, moneymaking ventures in China as hostages.’

  • ‘But in their daily operations, many of these companies face intellectual property theft, unpredictable and predatory policymaking, intrusive surveillance by secret police and the threat of exit bans or even employee arrest arising from ordinary business disputes.’

‘Because Beijing has punished so many companies and countries for a range of perceived political slights — from quoting the Dalai Lama in marketing campaigns, to shunning cotton allegedly harvested by slave labour — many international companies in China do feel like hostages.’

  • ‘But they tend to blame politicians, media or human rights groups in their home countries for antagonising their captors.’

‘Companies such as Volkswagen, Apple, Starbucks, Nike, Intel, Qualcomm, General Motors and H&M are all reliant on the huge and growing Chinese market.’

  • ‘Various western companies, including several of these, have lobbied in public or in private on behalf of the same government that holds them to ransom in China.'
  • ‘Some have been punished all the same.’

‘Most recently, companies including H&M and Nike were subjected to state-organised consumer boycotts for their refusal to use cotton allegedly produced using Muslim Uyghur slave labour in western China.’

  • ‘Unfortunately for companies heavily reliant on China, it is no longer enough to stay quiet about human rights abuses, unfair business practices or political interference.’
  • ‘If you want to make money in modern China you have to toe the Communist party’s line, engage in ostentatious displays of fealty and assist in its propaganda efforts globally.’

‘In a speech last year, President Xi Jinping made clear he wants to increase this leverage, saying the party “must tighten the dependence of international production chains on China” in order to form a “powerful countermeasure and deterrent capability”.’

‘The environmental, social and governance movement sweeping through many companies in the west makes their situations in China even harder.’

  • ‘What exactly is the ESG policy of these companies when it comes to “genocide”, as the US state department and the parliaments of Canada, the Netherlands and UK have formally described the situation in Xinjiang?’

‘Senator Marco Rubio of Florida has a point when he calls Delta Air Lines “the height of hypocrisy” for opposing voter legislation in the US state of Georgia while partnering with a government he accuses of being “actively engaged in genocide” in Xinjiang.’

  • ‘Delta is a shareholder in state-owned China Eastern Airlines.’

‘The hypocrisy and symptoms of Stockholm syndrome are not unique to companies.’

  • ‘New Zealand’s government has been admired in many parts of the world as a paragon of progressive values.’
  • ‘But when it comes to China, the country’s “independent, values-based” foreign policy appears to be premised more on fear and greed.’

‘Even before China imposed unofficial sanctions on Australia for daring to call for a genuine investigation into the origins of the pandemic, Wellington went out of its way not to offend Beijing.’

  • ‘The country’s foreign minister has even called into question the Five Eyes intelligence-sharing arrangement that has existed between the US, UK, Australia, Canada and New Zealand since the second world war.’
  • ‘Presumably the goal was to sell a bit more milk powder into the Chinese market.

‘This prompted horror in other western capitals and outpourings of delight from Chinese state media.’

  • ‘What the government of New Zealand and many others seem to forget is that acquiescing to the demands of kidnappers only encourages them to take more prisoners.’

More

CHINAMacroReporter

January 31, 2021
China Tests Biden
In today’s issue: 1. China Tests Biden Over Taiwan / 2. The UK Stands Up, the U.S. Not So Much / 3. Why Impeding U.S.-China Capital Flows Isn't Easy
keep reading
January 27, 2021
Xi Jinping: 'Why We All Just Get Along?'
In today’s issue:1. Biden Shows his Hand on China / 2. Xi Shows his Hand on the U.S./ 3. Multi-Lateralism, Chinese-Style / 4. Cooperation or 'Strategic Competition'?
keep reading
January 27, 2021
'Xi Jinping Wows Them at Davos'
‘The test for the Biden team is whether it will be tripped up by the feints toward international norms and comity that punctuate Mr. Xi’s pattern of regional aggression.’
keep reading
December 30, 2021
Q&A 4 | Is China Exporting Inflation?
'‘China has its own issues. If you look at the CPI inflation, it looks more moderate. ‘If you look at the producer price inflation, it looks more severe.’
keep reading
December 30, 2021
Q&A 2 | Will the Gender Imbalance Keep Housing Prices Firm in the Medium Term?
‘The part of housing prices caused by gender-ratio imbalance is not going to go away in the medium term. But the government has ways to create volatility in the housing market.’
keep reading
December 30, 2021
Q&A 3 | Property 2022: Stabilization or Growth?
‘The goal is to stabilize housing prices while having housing sector grow.’
keep reading
December 30, 2021
Shang-jin Wei Presentation-3 | Analyzing the Gender Imbalance Data
‘Compare these with graph showing the impact of the same factors on rental prices...'
keep reading
December 30, 2021
Shang-jin Wei Presentation-2 | Gender Imbalance as a Driver of Housing Prices
‘Why does gender imbalance have such an outsize impact on China’s housing prices?'
keep reading
December 30, 2021
Q&A 5 | Will Xi Continue to Favor the State Over the Private Sector?
‘He wants to see a bigger role for the state in the economy. But in the last two years, he has done some course correction. For example, after talking up the role of state-owned firms and building stronger, bigger state-owned firms, he is talking about the equal importance for the private sector.’
keep reading
December 30, 2021
Q&A 7 | Why Did Beijing Ban Online Tutoring?
‘Each policy in isolation – whether its banning online tutoring or protecting data or enforcing anti-monopoly regulations or any other - has its rationale.’
keep reading
December 30, 2021
What Are Your Top of Mind Concerns?
I asked the participants what are their top of mind concerns about China.
keep reading
December 7, 2021
Getting (Xi Jingping's) Priorities Straight
How do you make investment or business decisions in the face of the uncertainties created by Xi Jinping's reshaping China's economy? In this issue, I'll give you a few different ideas on how you might deal with that uncertainty.
keep reading
December 7, 2021
Look Through the Rights Lenses
Getting down more to the nitty-gritty, if you’re evaluating a sector or a company, get your lenses right to get the details right.. Stonehorn’s Sam Le Cornu gives a good example of this in a Bloomberg interview.
keep reading
December 7, 2021
Sometimes You Just Have to Roll the Dice
Telling someone to align him or herself with Beijing's priorities still is generally good advice.And, when I tell you what those priorities are, I know I am right - until I'm not.
keep reading
December 7, 2021
Watch What Beijing Says - and Does
Besides listening to Xi Jinping, you can discern Beijing’s priorities and its likely actions through its big policies - and this is my point here.
keep reading
November 23, 2021
'Biden Has a Summit With Xi, but No Strategy for China'
‘Neither Taiwan nor strategic arms are a hot campaign topic, and China is not yet at the forefront of public consciousness. To ensure America’s eventual strategy is workable, political leaders need to debate the challenges so citizens can appreciate the implications of the choices they will have to make.’
keep reading
November 23, 2021
Xi Jinping's Leadership: 'The Inevitable Outcome of History'
Mr. Xi is the hero of a Resolution on the history of the Chinese Communist Party that painted his leadership as the inevitable outcome of history and all but gave him his third term. Tony Saich of the Harvard Kennedy School did a terrific analysis on this - you'll find it below, after my take.
keep reading
November 23, 2021
'Xi Jinping has made sure history is now officially on his side'
‘While there are murmurs of opposition, the historic plenary session would suggest that the future is in Xi’s hands. However, when politics is so deeply personalised and centralised, there is only one person to blame if things go wrong. Unless, of course, we get a new resolution on history that tells us who led the party astray, despite Xi’s earnest attempts to keep policy on the straight and narrow.’
keep reading
November 9, 2021
'America's China Plan: A Proposal' by Clyde Prestowitz
Outcompeting China and avoiding global extension of its authoritarian and coercive policies and practices is not really about China. It’s about America.
keep reading
October 27, 2021
Why China Won't Invade Taiwan - Yet
Forget Evergrande and the energy crunch. After the recent flurry of alarming headlines, here’s the question I get most often these days from CEO’s and institutional investors: Will China invade Taiwan in the next few years?
keep reading
October 17, 2021
An Energy Crunch. China's Latest Crisis. They Just Keep Piling Up.
‍‘Over the next six months or more, the energy crunch in China will be an even bigger challenge than Evergrande. Will make the Evergrande problem look tiny and has huge global implications. The lights go out in China!’ one experienced and very well-respected reader of long residence in China wrote to me in response the last issue on Evergrande.
keep reading
October 7, 2021
Just How Contagious is Evergrande?
Just as a personal crisis can lead you to dig deeper into yourself, so the rapid-fire events in China - with trillions of dollars of business and investment on the line - have led us to (finally) go deeper into how China works – and to come to grips with uncertainties caused by Xi Jinping’s recent moves to reshape the Chinese economy and the Party’s social contract with the Chinese people.
keep reading
September 27, 2021
'This Time Feels Different'
Just when we thought we were getting used to Xi Jinping’s tech reforms and social-engineering regulations, the Evergrande crisis heats up.
keep reading
September 19, 2021
AUKUS: A New World Order?
‍In case you passed over the news of AUKUS, the new strategic alliance among the U.S, the U.K., and Australia, here a few headlines to encourage a deeper look.
keep reading
September 7, 2021
Xi Jinping: Today, video games. Tomorrow, well ... just be good.
Today's issue is a heads up on what may be Xi Jinping's efforts to reshape Chinese society.
keep reading
August 28, 2021
The Taliban: 'China's Perfect Partner'?
Breaking through the blow-by-blow reporting that started when the Taliban began its sweep to victory are the geopolitical analyses of who gains and who loses in Afghanistan.
keep reading
August 15, 2021
'Xi’s Dictatorship Threatens the Chinese State'
‘Mr. Xi is determined to bring the creators of wealth under the control of the one-party state.’
keep reading
August 15, 2021
'Are you tired of losing yet, America?'
As I write this, Taliban forces have entered Kabul and are reportedly occupying the Presidential Palace.
keep reading
August 15, 2021
China Economy: Industrial Production Down, Demand Resilient
China’s industrial production down 10%. Demand resilient.
keep reading
August 15, 2021
'China Signals More Regulation for Businesses in Coming Years'
‘The State Council’s statement provides a guiding context to interpret current regulatory thrusts. The blueprint as an attempt by Chinese authorities to help investors understand the motives behind the regulatory push.’
keep reading
August 5, 2021
‘Global investors shocked to have discovered that China is run by Communists.’
‘Global investors are shocked to have discovered that China is run by Communists.’
keep reading
August 5, 2021
'Shocked Investors Scour Xi’s Old Speeches to Find Next Target'
‘While China’s policy moves can feel ad hoc particularly to foreign investors, the changes are quite targeted on certain sectors.’
keep reading
August 5, 2021
Don't Say Xi Jinping Didn't Warn You
‘Global investors are shocked to have discovered that China is run by Communists.’
keep reading
August 5, 2021
'China Wants Manufacturing—Not the Internet—to Lead the Economy'
‘Social media, e-commerce and other consumer internet companies are nice to have. But in his view national greatness doesn’t depend on having the world’s finest group chats or ride-sharing.’
keep reading
August 1, 2021
'Stock Market: China Doesn’t Care How Much Money Investors Lose'
‘Does Beijing not care how much money foreign investors have lost? Does the government really want to close China Inc.’s access to the deep pool of global capital? The short answer is, no, the government doesn’t care.
keep reading
August 1, 2021
'Xi's Four Pillars of Regulation'
‘Broadly, Beijing is concerned about four pillars of stability: banking, anti-trust regulation, data security and social equality. All of Beijing’s major interventions reflect these concerns.’
keep reading
August 1, 2021
China's Tech Crackdown: 'Nobody Saw It Coming.' — Huh?
‘Carnage in China's financial markets signals the beginning of a new era as the government puts socialism before shareholders, and regulatory changes rip apart the old playbook,’ writes Reuters’ Tom Westbrook.
keep reading

Heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.