
White House Weighs Limits on U.S. Portfolio Flows Into China - chenzhekl
https://www.bloomberg.com/news/articles/2019-09-27/white-house-weighs-limits-on-u-s-portfolio-flows-into-china-k12ahk4g
======
keiferski
The growing confrontation between the West and China seems to me to boil down
to a philosophical problem:

\- _Should free markets /societies/cultural entities allow participation by
all actors, even those which (in their own spaces) obviously don't play by the
rules of the entered market/society/culture?_

\- _Or, should entry into the entity be restricted to those that themselves
(in their own space) follow the rules of the entered culture?_

It seems to me that there are definite advantages and disadvantages to both
approaches and it's probably something that game theorists have addressed. To
use a convoluted, over-simplified metaphor of a playground:

\- _If we allow kids (that have different rules in their own playground) into
our playground, we run the risk of their rules overcoming or having a negative
effect on ours. We also enable them to play with us while having "bad" rules
on their own playground - some of which might give them an (unfair) advantage
over us on our own playground. However, we get the benefits of having more
kids and toys to play with. And, maybe the kids will choose our rules (which
we perceive as better) over their own._

\- _If we don 't allow them into our playground, we have less kids and toys to
play with. We also have no real direct influence on them - they can't see that
our rules are better in person, and we can't threaten to kick them out of our
playground if they aren't in it to begin with. However, we avoid the risk of
having their rules overwhelm ours and we worry less about them having unfair
advantages over us on our own playground._

~~~
input_sh
What other country from the West has a beef with China?

This is purely US vs China. Leave the rest of us out of your own mess please.

~~~
ng12
So what's the message, the EU is only interested in combating oppression when
there's no money on the table?

~~~
chvid
China today is a lot more free and open than when Nixon went to China in '72
to play them out against the Soviets.

The real issue is that as China continues to grow economically, its military
power grows as well and ultimately the US is no longer the dominant military
power in the south china sea. Rhetorics about fair trade, democracy, freedom
is just that, rhetorics; international politics is about raw power.

Europe has no military interest in the south china sea. And China does not
pose a military threat to us. Therefore we are fine with China's continuous
growth as it benifits us economically.

~~~
keiferski
The EU has put forth a picture of itself as a defender of human rights for
both EU citizens and global residents.

 _There are two main streams of human rights policy and action within the
European Union. One is to protect the fundamental human rights for EU
citizens, and the other is to promote human rights worldwide._

[https://europa.eu/european-union/topics/human-
rights_en](https://europa.eu/european-union/topics/human-rights_en)

I don't see how that is compatible with the frequent violations of human
rights in China. As an above commenter said: it seems to boil down to money.

~~~
chvid
Because it is bullshit. The current US administration is pushing issues now
that it has ignored in the past. Eventhough in the broad view these issues are
improving dramatically. Look at China today compared with how it was two or
three decades ago and it will show massive improvements on living standard,
environment, human rights, protection of minorities, intectual property
rights, rule of law etc.

~~~
asabjorn
Environmental? China emit more CO2 than the EU and US combined
[https://www.google.com/amp/s/www.forbes.com/sites/rrapier/20...](https://www.google.com/amp/s/www.forbes.com/sites/rrapier/2018/07/01/china-
emits-more-carbon-dioxide-than-the-u-s-and-eu-combined/amp/)

Human rights? They have started putting Uighurs, Buddhists and Falun Gong into
re-education camps
[https://en.m.wikipedia.org/wiki/Persecution_of_Falun_Gong](https://en.m.wikipedia.org/wiki/Persecution_of_Falun_Gong)

Two previous points also counter the rule of law point, which is admittedly a
western concept.

~~~
chvid
China is 1.4 B people; why wouldn't it have higher co2 emissions than EU and
USA?

Anyways. We can chat about particular data points. But if you look at the
broad picture over decades; you really have to be willfully blind to deny
massive improvements that have happened.

~~~
asabjorn
The claim though was that it had improved on these and other points. And at
least on these there seem to be a big and widely published degradation.

Can always talk about data on the other points as well to see what they say.

------
azurezyq
Ok, now WH is exploring all creative (and unprecedented) ways to fight against
China. I have to say this seems to have crossed a lot of boundaries, either
clear or vague ones.

And we've also seen WH is doing similar things (though at a different degree)
to close partners like Mexico.

So let's extrapolate, if there're some conflicts in interests between US and
major NATO countries, will WH do the same thing? Make America great again even
no one wants to talk to US?

~~~
greatpatton
Seems that the easy war with China is not that easy. So now the WH is
resorting to other means to put pressure on China. This will backfire as the
WH is trying really hard to make US less relevant. By actively using weapon
that were previously seen as a huge deterrent, you make them a short term
problem for China, but they will find a way around them and make them
ineffective. The WH is fighting will almost all major economies (apart SA,
Israel, and brexit Britain), and it's going to end pretty badly. I will be
very surprised if we don't get a market crack before end of next year.

~~~
Fjolsvith
What'll really surprise you is when the central banking system is shut down.

~~~
nosuchthing
Isn’t bitmain ramping down production already though?

------
fouc
I'm guessing that Chinese companies are somewhat similar to statutory
companies. I've heard that large Chinese companies have strong CCP oversight,
with a party member involved that the CEO/founder has to defer to.

So the question is - does it make sense for not-actually-public-companies from
other countries to be listed on the U.S. stock exchange? It could be
potentially misleading otherwise.

~~~
thephyber
The Alibaba listing in the US isn't even for stock in the Chinese company.
It's "stock" in a Cayman Islands holding company that doesn't have any
guarantee for stockholders to have any rights in the Chinese parent
company.[1]

When the US president uses the bully pulpit to insult and threaten American-
based multinational companies to suit his political / personal needs at the
threat of a DoJ / SEC investigation or FAA license threat, how is that much
different than a CCP official doing the same? I would argue it's not nearly as
far as my fellow Americans would like to think it is.

[1] [https://www.marketwatch.com/story/beware-alibaba-ipo-isnt-
re...](https://www.marketwatch.com/story/beware-alibaba-ipo-isnt-really-
selling-alibaba-2014-05-07)

~~~
hos234
True but American don't like being pushed around while the Chinese are used to
it. Which means the Bully is usually tolerated for much shorter durations than
Chinese Bullies are. Churchill's rise and fall is a good example.

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tanilama
Emmmm, this is crazy. Capital will find its way just not through US exchange

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iron0013
Thread title does not match link title or content.

~~~
riffraff
while the title is a bit more inflammatory than the article, it does say that
delisting is being considered amongst other options.

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basementcat
Would that just mean the securities will just trade on pink sheets? Or would
it be more likely that trading would migrate to a stock exchange in another
country?

~~~
stefano
The London stock exchange would be an obvious candidate.

~~~
cyborgx7
I heard people were moving away from doing stocks in London with Brexit
looming. Is this no longer the case?

~~~
riffraff
I know blackrock will delist quite a few EUR denominated ETFs[0] from the LSE,
but what stocks actually mentioned leaving the LSE?

[0] [https://www.etfstream.com/news/8949_blackrock-
delists-43-etf...](https://www.etfstream.com/news/8949_blackrock-
delists-43-etfs-from-lse/)

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panpanna
How would this affect foreign pension funds that invest in NYSE?

Would they just sell their Chineses stocks or move some investment to another
country??

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tibbydudeza
Time to bring out the duck and cover PSA videos ... US/UK vs China-Eurasian
hegemony ... sounds like 1984 all over again.

------
iscrewyou
Oh boy, this thread needs to be locked down. All the conversation has turned
into political short outbursts and I only see one comment actually remotely
talking about the topic.

Even the thread title is not what the article headline is. Maybe the title is
at fault for off-topic conversations.

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ackbar03
Im sorry but just reading this almost feels like an April Fools joke, except
sadly its September

------
nabla9
Normally the US government has extraordinary power over China in financial
sector.

But Trump has alienated all traditional allies. Threat to exclude China turns
into opportunity for others to exploit the situation. Euronext, London,
Toronto, Tokyo and Hong Kong are in the position to gain relative to NASDAQ
and NYSE.

ps. I think the change of delisting happening is less than 5%.

~~~
ainiriand
I do not understand why this comment is being downvoted. The OP is absolutely
right about this.

~~~
aianus
China hates Canada, no way these tech stocks are being listed in Toronto, it’s
nonsense.

------
jarym
On the one hand - I feel it is totally legitimate that the US take the view
that they want a symmetrical arrangement in so far as 'if Chinese firms can
access US investors then US firms should be able to access Chinese ones'.

On the other hand, this has the feel of trying to bully China into a trade
deal that is good for Trump but not for the Chinese. It could also hurt
investor confidence in the US.

Ultimately, its a tough one and while I think its a horrible path for the US
to be pursuing, I understand why they are thinking about it.

------
wruza
How would it change costs of chinese goods (esp. hardware) for a third world,
if implemented?

Edit: added chinese

------
kick
This seems reasonable, though the administration is likely doing it for the
wrong reasons. Genuine question: Is sentiment more important than correctness,
or is the opposite true?

~~~
AsyncAwait
> This seems reasonable

Does it? The U.S went to wars, killing hundreds of thousands of civilians to
force open markets to its products, it has been preaching the free market
mantra for decades. Regardless of everything else about China, they're now
starting to make some actually compelling products so the U.S is acting out.

I know the argument is that Chinese companies are just an extension of the
state, but you could say the same in reverse about the U.S.

I just assumed it's going to be more subtle than this, as an EU citizen, this
sends a clear signal to me that the EU is only an 'ally' as long as it keeps
buying American products.

~~~
tolqen
> I know the argument is that Chinese companies are just an extension of the
> state, but you could say the same in reverse about the U.S

What

~~~
simion314
Also US started wars , military actions or changed the governments around the
world,spied(maybe assassinations - I would apreciate someone if knows of a
good example of this) , pushed international law for the interest of the big
companies(aka for money) ex the banana wars
[https://en.wikipedia.org/wiki/Banana_Wars](https://en.wikipedia.org/wiki/Banana_Wars)

Also the government will intervene on the internal market too with
money,subsidies, regulations,exceptions to help the big companies,

in t he end the state and big companies are in a long relationship and there
is no way you can deny this just ways you can try to find arguments that is
fair and honest.

------
longcat
sadly the CCP don't play by any rules

------
ulfw
US Propaganda and sentiment as instigated by this administration against China
resembles cold war anti-Soviet sentiment in the 1970s and 80s.

------
aritmo
Looks like a proper shakedown.

------
djohnston
Not my VEMAX!!!

------
asdf333
i would recommend the documentary "the china hustle"

i was skeptical of the documentary before watching, but it is very good

------
robomartin
The China problem is of our own doing, of course. Up until Trump nobody had
any interest in addressing it. I'll just say nobody before him took this on
because of the potential for political suicide. Love or hate him (I'm +/\-
around neutral, hate how he presents the presidency, like most of what he is
actually doing when he is not busy saying stupid things) forcing a realignment
of China is a good idea.

This had to be done 25 years ago, when it would have been far easier to
accomplish. Attempting this today is equivalent to not detecting cancer early
enough for a simple operation to extract it fully with minimal consequences.
Instead, we wait until it has metastasized and nearly have to kill the patient
in an attempt to cure him. Notice my use of the word "attempt"...because there
are no guarantees.

The China problem, I think, can be boiled down to a few important line items:

    
    
        - Intellectual property theft
        - Currency manipulation
        - Terrible disregard of the environment
        - Objectionable labor practices
        - Predatory practices with foreign entities operating in China
        - Fraud in regulatory testing and standards 
          (UL/CE/TUV mark from China testing means nothing)
        - Lackluster of participation in foreign aid 
          (for the second largest economy it is embarrassing)
        - Asymmetric property ownership laws
        - Abuse of the global postal system 
         (free shipping from China because the US taxpayers subsidize
          their packages within the us to the tune of US $500 million per year)
    

There's probably more, though I think these are some of the main points. If
any other economy behaved this way they would be universally scolded in around
the world. If the US, Germany, France or the UK behaved this way we would have
massive marches all over the world. China does this and more and people, for
the most part, are either oblivious to it or don't care. The problem with this
is that they are sacrificing their own jobs and their kid's futures for their
inaction.

I think the value of playing with reasonably similar rules is that one entity
can't destroy other players by using out of the norm methods to destroy them
and then gain supremacy. This is why we have such things as antitrust and
monopoly laws. This is why such methods as price fixing and bribery are
illegal in the US and Europe. This is why we respect intellectual property,
fight for humane labor practices, respect safety testing of the products we
use and help less fortunate nations to the tune of hundreds of billions of
dollars and generally speaking.

China is almost the diametric opposite of this. And for that they likely
deserve a bit of a reality check today.

Non an easy problem to fix. Others have allowed this cancer to metastasize for
decades. To fix it today you have to be a complete a--hole and go for broke.
It looks like the job fits the guy in the White House. Not sure if he will
succeed. The other problem is that, in western democracies, leaders and some
policies tend to only survive term limits and election cycles, while in China
they know they can stay the course for decades.

------
cft
Are there US companies that are listed on mainland Chinese exchanges?

------
arisAlexis
This is typical tactics from Trump. Whenever there is a meeting he inflicts
maximum leverage and stress to the opponent. I wouldn't read much into this
honestly. It's a game.

~~~
krapp
I wonder when Trump will realize he's trying to play checkers on a chess
board?

------
RaceWon
More trade leverage and it will also destroy Biden. Brilliant.

------
Fjolsvith
Good.

The CCP pretty much owns every Chinese big company. And, they don't let people
examine their books. Who's to say that all that American investment money
isn't going into grossly or even fraudulently overvalued stock?

~~~
Traster
The SEC. If your concern is that companies listed on US stock exchanges aren't
correctly reporting their financials thats an issue for the SEC. It's not an
issue for a blanket ban on Chinese companies being listed. Preventing
Americans from being able to trade their investments easily on a reputable
exchange isn't going to help them.

~~~
atr_gz
Except the SEC has given Chinese companies an exemption from normal oversight.
I agree that there shouldn't be a blanket ban - but the companies should have
to follow the same rules as everyone else.

[https://www.chinalawblog.com/2019/06/china-and-the-u-s-
stock...](https://www.chinalawblog.com/2019/06/china-and-the-u-s-stock-market-
nowhere-to-go.html)

