The beneficiaries of globalisation are right to be worried

Dollar Renminbi Notes

The dispute between China and the US is likely to continue for many years as their clash of ideologies changes global trading patterns and supply chains.

A senior American politician publicly derided one of the most important British companies on a scale we have not seen since attacks on BP following its oil spill in 2010. Secretary of State Mike Pompeo accused HSBC of “kowtowing” to political forces in Beijing over its support for China’s proposed security law in Hong Kong.

These comments are not only of concern for the management of HSBC and rivals such as Standard Chartered. The decoupling of the American economy from China is now a central US foreign policy goal – and there will be significant changes in global trading patterns as a result. Even though company managers are currently distracted by the Herculean task of steering their businesses through the Covid-19 pandemic, this too needs addressing with some urgency.

The face-off between ideological extremists in Beijing, who have been spurred on after authoritarian Xi Jinping secured the presidency indefinitely, and Washington’s China hawks is not a temporary phenomenon. The aggressive stance against China will continue even if Joe Biden manages to win the Oval Office in November, as the Democrats also dislike technology theft and they have an even-larger axe to grind over human rights abuses against China’s repressed Uighur Muslim population.

View Full Article – published by Charles Stanley on 19th June 2020