Greedy Wall Street giants won’t fare well in Xi Jinping’s China
Nels Frye, 01 June 2021
Congrats to America’s finance bros for finally getting their reward from the Chinese Communist Party. But surely, after obediently lobbying in favor of opening up to Beijing for decades, Wall Street deserved more than it received.
Two finance giants, Goldman Sachs and BlackRock, can now operate wealth-management businesses on the mainland, partnering with China Construction Bank Corp. and Commercial Bank of China — state-run entities at the center of power in the Communist state. The result: Goldman and BlackRock will likely relinquish much in independence, data and intellectual property, while scrounging only scraps of the domestic finance market in China.
Wall Street is Beijing’s most valuable US ally, capable of influencing both Democrats and Republicans. Under former President Bill Clinton, Wall Street helped China win entrée to the World Trade Organization, and Goldman Sachs lobbied against human-rights pressure on Beijing, according to then-Secretary of State Warren Christopher. Goldman and others likewise fought tougher US stances against China on protectionism, currency manipulation and IP theft under the Bush, Obama and even Trump administrations.
Now those efforts will pay off. Goldman and BlackRock believe they can help Chinese entities invest abroad. The only problem: There is no free flow of capital from China, and even if there were, Chinese financial institutions would capture it.
