Five Chinese companies quit U.S. exchange
- Some of China’s and the world’s largest companies — Sinopec, China Life Insurance, Aluminium Corporation of China (Chalco), PetroChina, and Sinopec Shanghai Petrochemical Co — said they would delist from the New York Stock Exchange. The five Chinese state-owned enterprises are among dozens of Chinese companies under the scrutiny of U.S. regulators. The delisting decisions could signal the start of a China-U.S. decoupling in the financial sector, a big step toward an unwanted total decoupling.
- The China Securities Regulatory Commission (CSRC) and the U.S. Securities and Exchange Commission (SEC) have been in talks to solve an audit dispute caused by the Holding Foreign Companies Accountable Act (HFCAA) adopted in late 2020. The SEC has identified over 100 Chinese companies listed in the U.S. that could violate the HFCAA and requested them to hand in more details about their business operations.
More U.S. lawmakers visit Taiwan
- A five-member congressional delegation led by U.S. Senator Ed Markey (D-MA) arrived in Taiwan on Sunday for a two-day visit to the island. The trip is only 12 days after House Speaker Nancy Pelosi’s (D-CA), which had triggered high tensions across the Taiwan Strait.
- By avoiding direct military conflicts during Pelosi’s visit, China and the U.S. managed to put out a fuse of a World War III. But the symbolic visit had brought the risks of clashes to a higher level. While China ramped up its military operations around the island, foreign politicians and officials are emboldened to go to Taiwan. The immediate examples are the visits by Lithuanian Deputy Minister Agnė Vaiciukevičiūtė and the U.S. congressional delegation. China has sanctioned Pelosi and Vaiciukevičiūtė and probably would do similar to others.
- It is hard to predict how long such interaction would continue and what would end the loop. But With heightened uncertainty, guardrails to maintain the tensions under control are badly needed. For Beijing, the guardrails are the Three Communiqués, which state its unyielding “one-China principle,” and what Washington does is as important as what it says.
Xi could meet Biden in November
- Chinese officials are preparing for an in-person meeting between President Xi Jinping and U.S. President Joe Biden in Southeast Asia in November, The Wall Street Journal reported. But this could be overshadowed by Washington’s coming trade talks with Taiwan. On June 1, the U.S. Trade Representative (USTR) announced a new trade initiative with Taipei. The two sides then held an inaugural meeting of the initiative on June 27.
Estonia, Latvia withdraw from China-CEEC cooperation
- Estonia and Latvia pulled out of the platform amid criticism against China for the recent Taiwan crisis and its stance in the Ukraine war. Both countries said they remain willing to develop “constructive and pragmatic relations with China” based on “rule-based order” and international values, including human rights.
- For China, economic development has been ranking first in its political considerations since the Reform and Opening-up. The Marxist theory of “the base determines the superstructure” (经济基础决定上层建筑) is prevailing in the country, public or private sector. Policies under such a mentality have worked well domestically, especially for Hans in the Mainland, for more than 40 years. However, when it comes to foreign relations, such thinking does not always work.
- For many Western countries, ideology and security could weigh heavier in their foreign policy decisions than economic development. The difference in mentality could confuse many Chinese decision-makers. China is the largest trade partner of the U.S. and Germany, but such close trade ties have not translated to stronger trust from these countries.
- China’s historical linkage with the USSR and the stereotype of communism could be part of the reason. However, China’s recent responses to challenges appear to strengthen the negative impressions. One way to clear up the misunderstandings could be more diversified narratives of China stories from more channels within the country.