Phase I Trade Deal

Dr. Jean-Marc F. Blanchard's picture

Run Bank Run? The Deposits Foreign Financial Firms Made in China Market (Still) are Not Liabilities

How fast sentiments can change! The much vaunted opening of China’s financial sector to foreign banking, insurance, and securities firms has become a source of angst with observers now wondering if foreign financial players such as Allianz, Citigroup, JPMorgan, Nomura, and UBS will get caught up, directly or indirectly, in China-United States (US) tensions relating to geopolitics, trade, foreign direct investment (FDI), portfolio investment, Covid-19, and the changed status of Hong Kong. Potentially at risk are billions of dollars in FDI such companies have spent to acquire majority stakes in or establish securities joint ventures (JVs), build up their China insurance operations, and begin mutual fund operations.

MNCs in the News-2020-03-20

China’s National Development and Reform Commission (NDRC) notes China will strive to help foreign businesses resume normal operations, will shorten the negative list for foreign direct investment (FDI), and will advance major foreign-invested projects. Shanghai city government highlights that major foreign financial firms continue to inject FDI into the brokerage, asset management, and securities sectors, among others, despite the Covid-19 epidemic. China State Construction Engineering Corporation places first tower cap in mega skyscraper project for Egypt’s new administrative capital, part of the Belt and Road Initiative. Japan’s Ministry of Finance starts to solicit public comment on future revisions to the Foreign Exchange and Foreign Trade Act. List of Japanese companies suspending operations at factories in the United States (US) due to coronavirus grows. Korea Rail Network Authority (KRNA) wins a bid from Thailand to manage a high-speed railway linking three airports. Hyundai Rotem, a subsidiary of Korea’s Hyundai Motor Group, ordered by Brazil’s Ministry of Labor to pay large fine plus moneys due workers for failing to pay workers overtime pay.

Executive Director Jean-Marc F. Blanchard interviewed for Frankfurter Allgemeine story on the China-United States Phase I Trade deal

Dr. Jean-Marc F. Blanchard, Executive Director of the Mr. & Mrs. S.H. Wong Center for the Study of Multinational Corporations, was interviewed for a Frankfurter Allgemeine, Germany’s equivalent of the Wall Street Journal, article published in the wake of the conclusion of the Phase I Trade deal between China and the United States (US) in mid-Januaruy. This wide-ranging piece asked why the deal was struck, which side won, and what is the likely direction of the China-US relationship going forward. Dr.