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. Continue reading “Article: Greedy Wall Street giants won’t fare well in Xi Jinping’s China”
China’s finance ministry is considering a proposal to transfer its shares in China Huarong Asset Management Co. and three other bad-debt managers to a new holding company modeled after the one that owns the government’s stakes in state-run banks, according to a person familiar with the matter.
After the collapse of Lehman Brothers Holdings Inc., the Big Three rating companies were blamed for their enabling roles in the subprime mortgage crisis. Troubled securitized products would not have been marketed and sold without their seal of investment-grade approval. In fact, investors relied on their ratings, often blindly.
Being “tough on China” is politically popular in Washington these days, and Biden has come out of the gate swinging against Beijing. But “being tough” isn’t a policy and reflexively applying it to China doesn’t serve U.S. interests. A logical and realistic approach to Beijing, however, can.