What game is Blackrock playing?

Discussion in 'Wall St. News' started by themickey, Aug 18, 2021.

  1. VicBee


    Definitely political, but I wouldn't be so sure of who put the pressure on who.
    #71     Oct 3, 2021
  2. themickey


    Smart money From Soros to Elliott sounds alarm on Chinese stocks
    Nishant Kumar, Hema Parmar and Akayla Gardner Oct 6, 2021

    Western investors are backing away from Chinese companies, blaming politics and uncertainty for a souring stance on the world’s second-biggest market.

    On Tuesday (Wednesday AEDT), representatives of Man Group, Soros Fund Management and Elliott Management raised concerns about the outlook for Chinese stocks traded in New York and in Asia. Their comments came weeks after $US59 billion ($81 billion) investment firm Marshall Wace said some of those businesses have become “uninvestable”.

    The Shanghai Composite Index has increased just 2.7 per cent this year, trailing the 12 per cent gain for the MSCI World Index. AP

    “We are not putting money into China right now,” Dawn Fitzpatrick, chief investment officer at Soros, said at the Bloomberg Invest virtual conference.

    Fitzpatrick predicted that many companies listed in the US would soon relocate to Hong Kong.

    While she didn’t name any firms, Alibaba Group, JD.com and Didi Global are among some of the largest Chinese businesses traded in New York. The three have been under pressure for most of the year as China cracked down on mega-cap tech companies.

    Alibaba and JD.com are each down at least 33 per cent since mid-February, while Didi has plunged 47 per cent since its market debut in late June.

    The Shanghai Composite Index has increased just 2.7 per cent this year, trailing the 12 per cent gain for the MSCI World Index.

    The investor warnings follow Beijing’s sweeping anti-monopoly probes against Big Tech, cybersecurity reviews for foreign listings and a decision to ban profits in after-school tutoring companies, which sent shock waves through global financial markets last month. Investors now fret what’s coming next.

    “If you are investing in markets, it’s impossible to have no view about China,” Man Group chief executive officer Luke Ellis, who runs the world’s biggest publicly traded hedge fund firm, said at the Bloomberg conference. He added that the country looks less attractive than a year ago amid the crackdown on the tech and education sectors.

    Ellis also recommended that investors need to be more nimble, as holding investments with a 10-year horizon doesn’t make sense in a world where interventions and significant policy changes are expected.

    “What China is doing is quite explicit, but it’s not that different than what we see in a lot of the Western markets,” he said.

    Still, some top money managers see long-term potential.

    “It will continue to grow faster than the developed markets,” Blackstone chief operating officer Jon Gray said at the Bloomberg conference. “They’ve got a very entrepreneurial culture, they’ve got a government that wants economic growth to improve quality of lives, and I think that means, broadly speaking, that China should do well.”

    Marshall Wace co-founder Paul Marshall told clients in August that it’s now more likely that China’s listings will be largely confined to the mainland.

    “The effect of these various interventions, especially the timing of announcements around the Didi listing in the US, has been to discourage many US-based or international investors,” Marshall said. “You could argue that US-listed Chinese American depositary receipts are now uninvestable.”

    #72     Oct 5, 2021
  3. themickey


    Yeah right, with its antagonistic attitude, it should go far....
    #73     Oct 5, 2021
  4. themickey


    How Jack Ma treatment prompted Cathie Wood to quit China
    Matthew Cranston United States correspondent Oct 20, 2021

    Washington | Star fund manager Cathie Wood has been ripping investments out of China, citing concerns about the treatment of corporate leaders, overly zealous regulation, profit disincentives, weakening demographics and risks posed by the real estate sector.

    Ms Wood, the flamboyant founder and chief executive of $US45 billion ($61 billion) asset manager Ark Invest, said she started pulling out money when the founder of e-commerce giant Alibaba and former national hero Jack Ma was chastised last year.

    Cathie Wood is taking investments out of China. Sam Mooy

    “We had got into China because we saw their reaction to COVID – it was the most disciplined country in terms of monetary and fiscal policy during the crisis and I thought China had the possibility of becoming the Germany and Switzerland of the world,” Ms Wood told the annual Milken Institute Global Conference on Tuesday (Wednesday AEDT).

    “But as soon as Jack Ma was banished, effectively, last November we started pulling back,” she said.

    The Chinese billionaire disappeared from public view in late October, after his ill-fated appearance at a financial conference in Shanghai. “Then during February through May we were down 37 per cent, so we concentrated our conviction,” she said.

    banned ride-share company Didi from app stores a day after it listed on the New York Stock Exchange.

    Ms Wood said Ark’s flagship fund now has no Chinese investment, while its other funds have very small, specific exposures.

    “We do own some China in a few of our portfolios focused on autonomous technology and robotics. But we are very particular – they have to be low margin companies because margin is clearly not appreciated by the government any more – they want common prosperity.”

    Ms Wood was referring to President Xi Jinping’s speech in August where he talked about “common prosperity” as a policy goal, and called on high-income enterprises to “return more to society”.

    Ms Wood also expressed concern about China’s nervousness toward demographics and real estate investment. Chinese authorities have been cracking down on cheap credit in an effort to cool the country’s real estate market that has been driven by speculation.

    “What I don’t understand is why they are going after real estate, which accounts for 75 per cent of household savings in China. If prices are going down which they have been, then that will really hurt consumer confidence and I think it already is.

    “Last weekend the national government went after the regulators who had focused on the financial industry as well as the financial institutions. And so I’m just saying, ‘wow we’re playing with fire!’.”

    She too is circumspect about China’s demographics. China has been confronting the lowest fertility rates it has experienced in seven decades as well as a material gender imbalance.

    “I think President Xi is very unsettled that China’s three-child policy is not working. And that’s very forecastable,” Ms Wood said.
    #74     Oct 19, 2021
  5. themickey



    UBS Going ‘Full Bull’ on China Despite Outflows, Growth Worry
    Marion Halftermeyer, Bloomberg News

    Ralph Hamers Photographer: Stefan Wermuth/Bloomberg , Bloomberg

    (Bloomberg) -- UBS Group AG Chief Executive Officer Ralph Hamers pushed back against broadening concerns over the growth outlook in China, despite recent turbulence around China Evergrande Group and worries that government policy will hurt the wealthy.

    “I’m strategically full bull on China, absolutely,” Hamers said in an interview with Bloomberg TV’s Manus Cranny on Tuesday. “We plan to invest more.”

    The bank experienced $1.8 billion in asset outflows for its wealth business in Asia Pacific in the third quarter and experienced an overall drop in the assets it manages of 5%, due to negative market performance and foreign currency effects, totaling $3.9 billion.

    Analysts from Bank of America Corp. and Citigroup Inc are among those that have warned that China faces a sharper growth slowdown than most expect, as the push to cut reliance on real estate combines with power shortages and the pandemic. Those factors plus President Xi Jinping’s push to curb wealth excesses may stoke pessimism among wealthy families and entrepreneurs into next year.

    Chief Financial Officer Kirt Gardner confirmed in a call with analysts after third-quarter earnings were released that wealth-management clients in China are becoming more cautious and deleveraging. Analysts raised worries about growth prospects in Asia multiple times.

    “Asia always recovers faster than expectations and we’ll see that going forward,” Gardner said on the call.
    #75     Oct 26, 2021
  6. themickey


    All the more reason not to put money with these so called 'fund managers'.
    One stupid is enough, no point making it two stupids.
    #76     Oct 26, 2021
  7. https://www.arabianbusiness.com/461...rities-are-scrambling-to-slow-down-the-exodus

    Big multinational companies moving out of China
    Gallery View|Expand View
    15 OCTOBER 2021

    Famous firms pulling out of the People's Republic
    ANDREW HOLBROOKE/Corbis via Getty Images
    As the US-China trade war rumbles on and relations between other liberal democracies and Beijing deteriorate due to everything from intellectual property (IP) theft to human rights violations in Xinjiang and the eroding away of Hong Kong's autonomy, many globally-renowned companies are deserting China. In fact, research firm Gartner revealed last year that a third of supply chain leaders had plans to move at least some of their manufacturing out of China before 2023. Coronavirus-related sales slumps and supply chain disruption, as well as rising production costs, have also hastened the exodus. Read on to discover which world-famous firms are partially or completely pulling out of the People's Republic. All dollar amounts in US dollars.

    A study by the UBS Evidence Lab found that a staggering 76% of US companies with factories in China were in the process of or considering moving operations to other countries in 2020. They include sportswear colossus Nike. The firm's suppliers have been relocating production facilities to southeast Asia and Africa for some time now, and the company reviewed its supply chains in Xinjiang too following stories of the mistreatment of Muslim Uyghurs in the region. Swathes of Chinese people then boycotted international brands such as Nike who chose to speak out against what was happening in Xinjiang. Sales were down by 59% in April compared to the previous year as shoppers turned to domestic companies instead, according to Morningstar Inc.

    Anthony Dixon/AFP/Getty
    Though the bulk of Apple's manufacturing will remain in China, the tech giant has been encouraging its suppliers, which include Taiwanese firm Foxconn plus Delta Electronics and Pegatron, to move up to 30% of iPhone production from China. Foxconn, for instance, is investing up to $1 billion (£762m) to expand a plant in India, while other contract manufacturers are setting up in Vietnam, Thailand and Indonesia. Apple is also planning to have 30% of its classic AirPods produced in Vietnam instead of China, while a “significant number” of iPads were set to be produced in Vietnam as of mid-2021, according to Nikkei. That said, Vietnam has been hit particularly badly by the Delta variant of coronavirus, which has caused delays to Apple’s transition into the country.

    Samsung Electronics
    Chintung Lee/Shutterstock
    American companies aren't the only ones beating a retreat from China. South Korea's Samsung Electronics shut its remaining smartphone factory in the country in 2019, reportedly turning the city in which it was based into a ghost town. Further closures were announced last year, with Samsung ceasing production at its last PC plant in China in August, instead moving operations to Vietnam, and the company also shuttered its only TV factory in the country last November.

    Now read about the companies richer than entire countries

    LG Electronics
    Fellow South Korean firm LG Electronics has followed in the footsteps of Samsung and relocated the manufacturing of some of its products from China. In an effort to avert hefty US tariffs, the company shifted all production of refrigerators bound for the American market from China's Zhejiang province to South Korea.

    Alex Grimm/Getty
    Almost a quarter of German companies operating in China were planning to relocate production from the country in 2019, according to a report by the German Chamber of Commerce in China. For example, Adidas has halved its Chinese manufacturing since 2010, with much of the production moving to Vietnam, and pledged in July last year to cut all ties with suppliers implicated in a report that uncovered forced labour being used in some factories. Like Apple, Adidas also felt the impacts of Vietnam’s rising COVID-19 infection rate, which has stalled production since mid-July and is expected to cause losses of up to $600 million (£431m) during the latter half of 2021. Adidas also saw its sales plummet on Chinese ecommerce giant Alibaba after the company took a stand against the treatment of Uyghurs in the Xinjiang region. In April, sales dropped 78% compared to the same period in 2020, according to Morningstar Inc.

    Adidas' German arch-rival Puma is shifting production away from China as well. The company, which makes more than a quarter of its products in the People's Republic, is keen to diversify its manufacturing base and supply chains, not to mention avoid US tariffs by producing more of its running shoes, sportswear and other products in Bangladesh, Cambodia, Indonesia and Vietnam. The brand faced online attacks in March following statements it made about the treatment of Uyghur Muslims in China, which prompted uncertainty about the company’s future sales in the country. Sales did slow after a strong first quarter, and Puma CEO Bjorn Gulden said: “There is less activity in the Western brand stores [in China] than there would have been if tension wasn’t there”.

    Read more about the Adidas and Puma split and other family feuds that spawned two companies

    US teleconferencing platform Zoom has skyrocketed in popularity during the COVID-19 pandemic, but while the firm behind the app is going from strength to strength, opening new data and R&D centres in India and the US, it announced it was stopping direct sales to customers in mainland China in August last year. Its video conferencing services are still available via third-party partners.
    Tomohiro Ohsumi/Getty
    In a bid to reduce the country's reliance on China, the Japanese government set aside 243.5 billion yen ($2.2bn/£1.7bn) in April last year in order to incentivise domestic companies to pivot production away from the People's Republic and into Japan and southeast Asia. Among the 87 firms that benefitted from state subsidies is world-renowned consumer electronics company Sharp, which is majority-owned by Taiwan's Foxconn.
    Kris Tripplaar/SIPA USA/PA
    American firm Hasbro moved a significant proportion of its production out of China to factories in Vietnam and India. Amid the ongoing US-China trade war, the world's number one publicly-listed toymaker expected to produce around half of goods destined for the American market in China by the end of 2020, down from just under two-thirds in 2019. Despite lower levels of production in China, importing goods is causing havoc for Hasbro as the company is one of many suffering from the global shipping container shortage that is preventing goods from being transported from China to the US.

    Kia Motors
    Joining other South Korean companies such as Samsung and LG that are turning their backs on China, automaker Kia Motors shut one of its key plants in the country in 2019. The Seoul-based company has put the closure down to slumping sales in the People's Republic as a result of a boycott in 2017 of South Korean companies, which was precipitated by the South Korean military's deployment of a US-made missile defence system.
    Hyundai Motor Group
    Unsurprisingly Kia’s parent company, Hyundai Motor Group, has also taken steps to shift manufacturing away from China. With sales in the country flagging following the 2017 boycott of South Korean businesses, the company closed its Beijing plant in May 2019. The company posted operating losses of 1.152 trillion won ($1bn/£726m) in China for 2020, which was its worst performance since Hyundai Motor Group was first established in the People’s Republic in 2002. While production in China has dropped, the firm is boosting manufacturing of its vehicles in India.

    Hyundai Mobis
    Likewise, Hyundai Mobis, which supplies parts for Hyundai Motor Group and Kia, has followed their lead by closing its plant in Beijing. Having cut production in China, the company has ramped up investment in South Korea, where it is set to build a third electric vehicle components factory in the city of Pyeongtaek. The facility was scheduled to be up and running by the latter half of 2021 and is in addition to similar plants in the cities of Chungju and Ulsan.
    Stanley Black & Decker
    Scott Olson/Getty
    With the US-China trade war showing no sign of abating, Stanley Black & Decker is also on the move. The industrial tools and household hardware maker permanently closed its factory in Shenzhen in November after 25 years of operation. Growing competition and rising labour and land costs were cited as reasons for the closure. Stanley Black & Decker had planned to open its brand new 425,000-square-foot, $90 million (£68.5m) factory in Fort Worth, Texas by the end of 2020, although it was delayed until this year.

    As relations between the US and China worsened and the trade conflict intensified, Dell quietly moved production and supply chains away from the People's Republic. In fact, the Nikkei Asian Review reported in 2019 that the Texas-headquartered tech company was planning to shift up to 30% of its notebook production out of China.

    That same Nikkei Asian Review report cited anonymous sources stating that Dell competitor HP was also planning to relocate 30% of its notebook production away from China. The reasoning behind both moves was to avoid the punishing US tariffs on tech products produced in the People's Republic for the US market.

    Robyn Beck/AFP/Getty
    Google is more or less blocked in China, but the search engine's parent company Alphabet still produces hardware products in the country, although perhaps not for much longer. As supply chains have become disrupted, the tech behemoth has moved manufacturing of its flagship Pixel smartphone to Vietnam and will reportedly produce various smart home products in Thailand rather than the People's Republic, while production of its Cloud motherboards and Nest products has relocated to Taiwan and Malaysia. Shifting production away from China has been a longer process than hoped though because of outbreaks of COVID-19 in countries such as Vietnam.

    Peter Summers/Getty
    After moving production of its Surface line of notebooks and desktop PCs from the US to China in 2017, reports also suggested Microsoft was planning to move production to north Vietnam during 2020. The US tech titan has been tight-lipped about the news, but the move is thought to have been fast-tracked because of COVID-19.
    Evan Lorne/Shutterstock
    Now owned by Microsoft, the careers networking site has closed its Chinese site. LinkedIn senior vice-president Mohak Shroff wrote: "We're facing a significantly more challenging operating environment and greater compliance requirements in China." LinkedIn had been criticised for blocking the profiles of some journalists. It says it will launch a jobs-only version of the site, called InJobs, later this year.
    Volkova Vera/Shutterstock
    Even before COVID-19 disrupted supply chains and the US-China trade war turned even uglier, American action camera company GoPro had relocated much of its US-bound manufacturing away from China to Mexico, a move that was announced back in December 2018.

    John Nacion/NurPhoto/PA
    Though Intel remains confident in the Chinese economy and is strongly committed to operating in the country, the Silicon Valley-based semiconductor chipmaker has followed many US companies by shifting the manufacturing and assembly of some of its wares from the People's Republic to Vietnam. Intel’s former CEO Bob Swan also wrote to then-President-Elect Joe Biden in November, outlining the necessity of a “national manufacturing strategy” to “ensure American companies compete on a level playing field” in response to the likely scenario of China dominating the semiconductor chip production industry in the next decade. The company’s new CEO Pat Gelsinger reinforced this message in March when he announced a $20 billion (£14.4bn) plan to build two new chip manufacturing facilities in Arizona. Intel then announced in September that it would be investing up to $95 billion (£68.2bn) in producing chips in Europe as the company seeks to add production capacity during the global semiconductor shortage.

    Pornchai Kittiwongsakul/AFP/Getty
    Sony closed its smartphone plant in Beijing in 2019 and moved production to a factory near Bangkok, Thailand. However, the Japanese tech company was at pains to stress that the move was prompted by disappointing sales and rising costs in China rather than the US-China trade conflict. Sony also opted to move its regional executives from Hong Kong to Singapore in July last year.
    In 2019, Nintendo moved some production of its Switch console from China to Vietnam but, like Sony, the Japanese video games company said the move has nothing to do with the US-China trade war and was more about diversifying its manufacturing options and avoiding putting all its eggs in one basket.

    Under Armour
    In light of the US-China trade War, American sportswear and casual apparel company Under Armour has mapped out a plan to reduce its reliance on manufacturing in China in favour of countries such as Vietnam, Jordan, the Philippines and Indonesia. The company is aiming to source just 7% of its products from China by 2023, down from 18% in 2018.
    Steve Madden
    Arnold O. A. Pinto/Shutterstock
    Steve Madden shoes and handbags will no longer be produced in China. The New York-based fashion company was hit by Trump administration-imposed tariffs and plans to gradually move production of its footwear and accessories to Cambodia, Brazil, Mexico and Vietnam in order to keep costs for its US customers on an even keel. After suspending the process because of the pandemic, Steve Madden had scheduled to start shifting production away from China earlier this year.
    Old Navy/Gap
    Companies are not only relocating their manufacturing operations away from China, but many foreign retailers have decided to bow out of the country altogether. They include Gap sub-brand Old Navy, which shuttered all of its 10 stores and concessions in China in March 2020, planning to focus its attention on the North American market instead.

    Now discover big companies that are closing stores across the US

    British fashion retailer Superdry, which is known the world over for its coats, T-shirts and other clothing that fuse classic Americana with Japanese-inspired graphics, is also bowing out of the mainland Chinese market following a strategic review. Amid lacklustre sales, the firm decided to close 25 company-owned stores and 41 franchise locations.
    Space NK
    David M. Benett/Dave Benett/Getty
    Space NK has also struggled in China. Founded in London's Covent Garden in 1993, the luxury beauty retailer entered the Chinese market in 2018 but decided last year to exit the country. Its eight locations and Tmall online store closed for good at the end of May last year.
    The New York Times
    The New York Times decided to move part of its Hong Kong office to Seoul, South Korea, in response to Beijing's controversial security law which came into effect in June last year. The law curtails freedom of speech in the Special Administrative Region. According to the US news outlet, the law "unsettled news organisations and created uncertainty about [Hong Kong's] prospects as a hub for journalism".

    Peter Austin/Shutterstock
    The move came hot on the heels of Naver's announced withdrawal from Hong Kong. The South Korean web services firm, which owns a majority of Line, Japan's answer to WhatsApp, was the first major foreign company to leave the Special Administrative Region due to privacy concerns. The business planned to relocate its data back-up centre to Singapore.
    Quanta Computer
    Sam Yeh/AFP/Getty
    Taiwan's Quanta Computer is the world's third biggest electronics manufacturing services company and a major supplier of data centre servers to US tech firms such as Google and Facebook. The company opted to pivot production away from China and moved some of its manufacturing from the country to a new $500 million (£383m) plant in the Taiwanese municipality of Taoyuan in 2019.

    Now read about the companies richer than entire countries

    #77     Oct 26, 2021
    beginner66, xandman and themickey like this.
  8. themickey


    Published 37 mins ago
    BlackRock targeted in new ad campaign for being too woke
    Consumers’ Research is throwing a million dollars at a new national ad campaign that hammers BlackRock

    By Eleanor Terrett FOXBusiness
    Consumers' Research executive director Will Hild explains how the organization is calling out 'woke' companies in a new initiative.

    The world’s largest money manager is getting put on blast for being too woke.

    Consumers’ Research, the nation’s oldest consumer protection agency, is throwing a million dollars at a new national ad campaign that hammers BlackRock for what it calls the money manager’s "shady ties" to the Chinese Communist Party and its CEO Larry Fink’s hypocritical woke virtue signaling.

    Consumers’ Research tells Fox Business it will soon be releasing information it has compiled on BlackRock's business dealings with future ads, zeroing in on Larry Fink specifically.

    Consumers' Research "Busted" ad (YouTube screenshot/ Consumers' Research)

    As Fox Business has previously reported, BlackRock is the industry leader in environmental and social governance (ESG) investing. ESG is a measure of a company’s adherence to social and environmental factors that socially conscious investors, such as BlackRock, use to screen for potential investments.

    In fact, Fink has previously warned companies in which BlackRock invests to either adopt ESG standards or face pressure in so-called proxy battles, during which investors vote on corporate governance issues.

    Consumers’ Research says that Fink is acting on a double standard, holding U.S. companies to high environmental and social standards but failing to do so with Chinese companies.

    According to SEC filings, BlackRock holds investments in two Chinese surveillance companies that have been blacklisted from U.S. exchanges for their involvement in human rights abuses.

    One is Hikvision, in which BlackRock holds a $15 million stake, and the other is IFlyTek, in which BlackRock holds a much smaller investment. Both companies were barred from doing business in the U.S. by President Trump due to their alleged involvement in the oppression of the Uighur population in Xinjiang.

    "BlackRock is funneling American dollars to China while cozying up to woke politicians to try and hide their involvement from the public," says Consumers’ Research Executive Director William Hild.

    But BlackRock argues that the beef with Consumers’ Research goes beyond its involvement with China.

    "As a fiduciary to our clients, BlackRock focuses on matters like diversity in the boardroom and climate risk because we believe these are material issues that can affect the long-term value of our clients' investments," said a BlackRock spokesperson. "Those are the issues the funders and leaders of this campaign do not appear to agree with."

    Since its release on Wednesday, the ad has received more than 160,000 views on Twitter and was shared by Republican Sen. Tom Cotton of Arkansas, a vocal critic of China.

    This is not first foray into taking on large U.S. companies for Consumers’ Research. In May, the organization targeted the CEOs of American Airlines, Coca-Cola and Nike for being too woke. In July, the group took aim at Major League Baseball and Ticketmaster for, it claimed, putting politics ahead of fans and customers when it pushed back against Georgia for changing its voting laws.
    #78     Oct 29, 2021
  9. themickey


    ‘A lot of uncertainty’ in China sending companies to the exits
    By Eva Dou November 29, 2021

    A new data protection law is changing the calculus for doing business in China, with foreign and domestic firms scrambling to comply, and some companies including LinkedIn and Yahoo choosing to leave.

    China’s personal information protection law, implemented this month, is the latest factor adding to a challenging political environment for businesses operating in the country and altering the cost-benefit analysis. While the untapped business potential of 1.4 billion consumers was once an irresistible draw, this is increasingly changing.

    Doing business in China is becoming a less attractive proposition for foreign companies.Credit:AP

    James Zimmerman, a Beijing-based American lawyer, said that the China market had become “less and less palatable for Western companies” because of “reputational risks of operating in an environment with extreme content censorship, and tighter regulatory conditions.”

    The trade war brought politics into US-China business to a much greater degree, with Beijing and Washington wielding tariffs and consumer product boycotts in their power struggle. Domestically, Beijing has launched a populist campaign against big business, effectively making the market less profitable for many companies under stricter new regulations.

    And for some Western business executives, the human-rights controversies of President Xi Jinping’s era have become a bridge too far, including a crackdown on ethnic minorities in the Xinjiang region that Washington classified as genocide; silencing of Hong Kong protesters through use of force and imprisonment; and, most recently, the disappearance of tennis star Peng Shuai after she accused a former top official of sexual assault.

    Women’s Tennis Association Chairman Steve Simon said last week the organisation is willing to cease its China operations, potentially losing hundreds of millions of dollars, if Chinese authorities don’t properly investigate Peng’s allegations.

    On November 2, the same day the allegations appeared on Peng’s verified social media account, Yahoo announced it was pulling out of the China market due to “the increasingly challenging business and legal environment.” Days earlier, LinkedIn had also cited a significantly more challenging operating environment in its decision to close the Chinese version of its networking site, though it said it would keep a simple China job listing site without a social feed or the capability to share articles.

    Yahoo had been downsizing its China operations for years, faced with diminishing business in the country because of censorship and competition from local players. In 2007, the company came under intense criticism in the United States for turning over emails of two Chinese political dissidents to Beijing authorities, which were used as evidence in their prosecution; they were later imprisoned. Yahoo shut down its email service in China in 2013 and closed its Beijing office in 2015.

    Still, the company hung on in the China market until now. While Yahoo didn’t go into details about its reasons for leaving China, its announcement occurred as the new data protection law came into effect November 1, which industry executives said would require multinational companies to make significant and costly changes to their processing and storage of data.

    The law has broad consumer-protection measures that limit companies - Chinese and foreign - from collecting consumers’ personal information without their consent, and from storing more personal data than necessary. It also restricts the transport out of the country of Chinese nationals’ personal data, an especially onerous restriction for multinational tech companies.

    There has been broad pressure on domestic and international businesses from Xi’s “common prosperity” campaign, a populist push to narrow the country’s wealth gap.Credit:AP

    “It’s created a lot of uncertainty,” said Lester Ross, policy head of the American Chamber of Commerce in China, about the new personal data law. He said AmCham has been communicating with Chinese regulators to request a period of forbearance to give US companies more time to comply.

    Clarisse Girot, Asia-Pacific director of the Future of Privacy Forum, said the Chinese law is largely modelled on Europe’s General Data Protection Regulation, implemented in 2018. But she said China’s version diverges from GDPR in its stipulations for China’s national sovereignty over data, instead of being purely about consumer rights.

    The law also comes amid broad pressure on businesses from Xi’s “common prosperity” campaign, a populist push to narrow the country’s wealth gap. A number of China’s most powerful companies have come under regulatory crackdown over the past year, and businesses have scrambled to make large philanthropic donations to prove they are supportive of the government effort.

    US video game maker Epic Games gave up its pursuit of the China market on November 15, several months after Beijing banned children from playing video games on school nights. Epic’s popular game Fortnite had been available on a trial basis in China for more than two years, but it failed to gain regulatory approval for a formal release.

    The departure of some foreign tech companies means less competition for local players, but it could bring longer-term challenges. China has benefited from the presence of leading overseas high-tech companies, which has helped advance the nation’s technological know-how through joint-ventures and tech transfer agreements.

    Ross said that China’s strict entry restrictions during the pandemic have been yet another challenge for business, as has an energy crunch that has disrupted factory production across the country. He said he hasn’t heard of any foreign executives receiving quarantine exemptions while entering China, unlike some other Asian countries, such as South Korea, that have allowed exemptions for business trips.

    Several smaller American companies that were considering entry into the China market have shelved those plans because of the country’s coronavirus restrictions, Ross said, without identifying them.

    Most nonessential travel into and out of China is still prohibited, and those able to travel to the country must complete at least three weeks in quarantine. In one northern Chinese city, Shenyang, the quarantine length was extended this month to a whopping 56 days, in a strong deterrent against visitors.

    The Washington Post
    #79     Nov 29, 2021
  10. VicBee


    And things are the way things should be.
    Rather than uncertainty, it seems to me China is applying clarity and foreign companies are free to decide to stay or leave.
    Unlike western nations where such decisions are evaluated and modified with input from various special interests before being implemented over rather long timelines, the CCP makes quick decisions with short deadlines for concerned parties to implement. They are also known to modify their decisions when CCP feedback is that their impact is unmanageable, which makes it rather difficult for invested local and foreign corporations to guide their ships. When the increased cost of doing business is weighed against hefty returns, most will go along with the changing rules. But if you add layers of international political drama, unexpected grafts and lower profits, we may find that foreign businesses may walk away from China. And that's the way free market should work.
    #80     Nov 29, 2021