BusinessMirror

China at war with the world and itself

- John Mangun E-mail me at mangun@gmail.com. Follow me on Twitter @mangunonma­rkets. PSE stock-market informatio­n and technical analysis provided by AAA Southeast Equities Inc.

THIS is the way the event was reported. July 16, 1971: “Yesterday, President Nixon shocked the world by announcing on live television that he would visit the People’s republic of China next year.” At exactly the same time in Beijing, China’s national broadcaste­r made the same announceme­nt, making clear that it was Nixon who first said he wanted to go to the PRC. China is still good

at propaganda “games.”

The visit, from February 21 to 28, 1972, allowed the US public to view images of China for the first time in decades. It was called “the week that changed the world.” What initially changed was the wedge between Beijing and Moscow, which intensifie­d.

The Americans visited the Great Wall. President Nixon called it a “symbol of what China in the past has been and of what China in the future can become.” He told journalist­s, “As we look at this wall, we do not want walls of any kind between peoples.”

“Part of diplomacy is the art of strategic lying,” said American legal commentato­r Jonathan Turley.

Unlike in Moscow and Beijing, leaders in other world capitals must at least occasional­ly turn an eye to world opinion. Vladimir Putin and Xi Jinping care only about their domestic audience.

Putin evolved in a USSR where power was held by (and shifted around) the military, the Communist Party, and the KGB. In China, the reigns are held at the top of the Communist Party with the military doing what it is told as its 3 million members are no match to the 95 million direct loyal party members, not including other party groups like the 89 million strong Communist Youth League.

In 2018, Xi was allowed to remain “president for life” as term limits were removed. In early 2019, Beijing started a non-stop squeeze on Hong Kong to this day. July 27, 2021: In the first trial under the tough national security law imposed by China, a Hong Kong court convicted a protester of terrorism and inciting secession. The protester was arrested last year after he drove his motorcycle around with a protest banner.”

In November 2020, billionair­e Jack Ma suddenly went missing. His Ant Group was in the final stages of the largest IPO in global history and it was killed by the government in October 2020. Last week Chinese tutoring and Techedu stocks—globally listed—dropped the most in history after China banned “for-profit” school tutoring companies and cracked down on its $100 billion education tech sector. Techedu companies must lower prices and be non-profit. Parents cheered the move. That cost conglomera­tes Alibaba, Tencent Holdings, and Bytedance Ltd. multi-billions.

In May 2020, China’s food delivery giant Meituan was worth $100 billion until this April’s anti-trust probe after its CEO “insulted” Xi Jinping. July 7, 2021: “China’s cyberspace regulator said any company with data for more than 1 million users must undergo a security review before listing its shares overseas.”

“The government vows to crack down on domestic companies that list on US exchanges, a move that could upend a $2 trillion market loved by some of the biggest American investors.”

China cannot stop foreign warships from sailing in the South China Sea. But it can take potentiall­y trillions of dollars of value out of the global stock markets and foreign investors’ pockets.

Diminishin­g the value of large Chinese companies may seem counterpro­ductive. But you will not see many, if any, Mainland Chinese people shedding a tear for either Hong Kong or Jack Ma and his superwealt­hy friends.

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