Wall Street and the U.S. business community have always been a soft spot for the U.S. in the U.S.-China confrontation, serving as a sounding board and fundraising machine for the Chinese Communist Party in the U.S. However, as the momentum of the U.S.-China confrontation is set, there are signs that Wall Street and the U.S. business community’s influence on the U.S. government is beginning to wane, and they may have to make a choice.
Wall Street’s Blood Transfusion to the Chinese Communist Party as a Lobbyist
In early February, Yang Jiechi, a member of the Chinese Communist Party’s Politburo, called on U.S. business leaders and former government officials to lobby the Biden administration to change former President Trump‘s hard-line policy toward China and to “set aside differences and expand common interests.
Yang’s shouting has its roots in the long-standing role of New York’s major Wall Street investment banks and the U.S. business community as key players in financing and lobbying for the Chinese Communist Party overseas.
According to Morgan Stanley’s website, Morgan Stanley has been deeply involved in China for 25 years, obtaining financing for Chinese clients in global equity capital markets totaling more than $320 billion. By the end of 2020, Goldman Sachs had provided $17.5 billion in financing to Chinese companies and government agencies, almost twice as much as two years earlier, according to its securities filings.
A report by the Rhodium Group and the National Committee on U.S.-China Relations also shows that U.S. investors hold about $1.1 trillion in stocks and about $100 billion in bonds issued by Chinese companies.
In the case of the Communist Party, working with Wall Street is a “win-win-two” situation, as it allows it to cultivate a “panda-embracing faction” that speaks for itself overseas, while gaining access to foreign expertise and financing.
This is also a good indication that the Chinese Communist Party is willing to allow U.S. financial institutions to operate in China despite deteriorating U.S.-China relations, and that Wall Street investment banks like Goldman Sachs are about to realize a decades-old dream of becoming the first foreign bank to gain 100 percent ownership of a Chinese joint venture.
Ryan Hass, a former China expert in the Obama administration, said China has tried to use Wall Street as a “ballast” for relations between the two countries in the past, and that “the confidence of the Chinese [Communist Party] is surprising in that they feel they They feel they can enlist the support of financial and business leaders to move the Biden Administration in the direction they prefer.”
Kyle Bass, founder of the Hayman Capital Management hedge fund, has told the Epoch Times, “When you come to Washington, you encounter all kinds of powerful entities in government, pushing forward either legislation or administrative reforms that some people want, and most of the Time the main opposition is Wall Street, because think about it, they’re all chasing one thing. “
Wall Street’s influence on the U.S. government is beginning to wane
The U.S. once used its global policy of business and trade with China as a door to open up freedom and democracy in China, but now they find the Chinese Communist Party becoming increasingly powerful and hostile. Wall Street’s influence on the U.S. government is beginning to wane as the U.S.-China confrontation becomes a foregone conclusion.
During the final period of the Trump Administration, the U.S. sanctioned Chinese Communist Party officials for suppressing the pro-democracy movement in Hong Kong, stated that the Communist Party had committed genocide against the Uighurs, banned cotton imports from Xinjiang province, and prohibited U.S. investment in Communist Party military-related enterprises.
Despite its reluctance to fight an ideological war with the CCP, the Biden administration has not softened on these values, technology and trade issues as much as the CCP had expected. Secretary of State John Blinken not only endorsed Pompeo‘s CCP statement on the genocide of the Uighurs, but also sanctioned two other Xinjiang officials, and on March 16, Blinken sanctioned 24 more Hong Kong and Chinese officials for undermining Hong Kong’s autonomy.
Senator Tom Cotton’s report on the targeted decoupling of the U.S. and Chinese economies, “Defeating China (CCP),” and the final report of the National Security Council on Artificial Intelligence (NSCAI), which cites China (CCP) as a competitor, are both bipartisan efforts. The final report of the National Security Council on Artificial Intelligence (NSCAI) with China (CCP) as a competitor is a bipartisan effort.
On March 24, the U.S. Securities and Exchange Commission (SEC) issued a statement that foreign companies already listed in the U.S. will face delisting risk if they do not comply with U.S. auditing standards for three consecutive years. It is also required to state whether there are any Communist Party members on the board of directors and whether the Communist Party constitution is included in the company’s articles of incorporation. After the statement was introduced, Chinese stocks plunged in response to the rising U.S. stock market, which simply smashed Wall Street’s rice bowl.
In a March 23 Washington Post article titled “Wall Street’s foray into China increasingly at odds with Biden’s hard-line stance,” national security adviser Jake Sullivan specifically mentioned Goldman Sachs by name in February when describing the Biden administration’s trade policy, but Instead of praising Goldman Sachs, Sullivan said, “Our first priority is not to get Goldman Sachs market access in China,” and “our first priority is to make sure that we can deal with China’s (Communist Party of China) trade abuses that are hurting American jobs and American workers. “
Returning to Yang Jiechi’s shout-out to U.S. business leaders, former U.S. deputy national security adviser Matt Pottinger analyzed in an article in the Wall Street Journal that while Biden’s strategy toward China differs from Trump’s, there has been bipartisan consensus on China over the past few years. As a result, Beijing has focused its influence campaign on the U.S. business community, and “Beijing knows that its efforts to influence Washington are increasingly futile.”
The Washington Post makes a similar claim, “In this populist era, banks and businesses no longer play a traditional role in shaping U.S. trade policy.” “Relative to previous administrations, China’s (Communist Party of China) influence over Biden will be diminished.”
U.S.-China ideological competition inevitable How U.S. companies choose
U.S. businessmen want simple, profitable business relationships and have always rejected the U.S.-China relationship as an ideological battle, Booming’s analysis said. But the two leaders’ respective strategies are clear: U.S.-China competition at the ideological level is inevitable, if not central.
If you want to do business in China, you must make choices, you must sacrifice American values, ignore genocide in China, ignore Beijing’s broken promises of a “high degree of autonomy” for Hong Kong, and so on, Bomen said.
In a speech published last year in The Truth, Xi said that China “must strengthen the dependence of international production chains on China” in order to “create a strong counter and deterrent capability. In his January 5, 2013 speech, which has been sealed for six years before being published, Xi said, “Facts have repeatedly told us that Marx and Engels’ analysis of the basic contradictions of capitalist society is not outdated, nor is the historical materialist view that capitalism must die and socialism must prevail.”
Biden’s Interim National Security Strategy Guidance also makes it clear that “we will ensure that U.S. companies do business in China without sacrificing American values.”
Boming suggested that U.S. companies should confront the changing situation over the past few years and acknowledge that the reality is unchangeable, that it is difficult to please both Washington and Beijing, and that crossing two boats with one foot is risky.
Most importantly, Bomen said, the United States and its allies must consider increasing America’s collective leverage in this competition in every policy, bill, and cooperative project they adopt, and not surrender it to a hostile dictatorship in Beijing.
Bomen said, “Beijing is correct in its view that American business leaders, boards of directors and investors, must decide which side they want to help win.”
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