The sense of China at a grassroots level is that the virus is almost behind us, and we are now moving into a post-COVID world. Restaurants are doing better business, masks are becoming less de rigueur. If it is indeed possible for China to survive and prosper as a standalone unit, then this is the future. Meanwhile, the borders are still closed with no indication of when they might reopen, and the general slide towards a wider and deeper decoupling continues apace.
Two good words to focus on to understand what’s happening are both acronyms – HSBC and ARM. HSBC publicly backed Hong Kong’s National Security Act after some rather unsubtle encouragement. Pompeo accused the bank of performing corporate kowtows, and the reaction in London was also surprisingly strong. Is HSBC going to have to choose in the end between one part of the world and another? If so, how does edging one of the world’s largest banks towards the need for such a choice help? Good questions.
Next comes Arm, which is a semi-conductor producer based in the UK, but owned by a Chinese company. Arm’s chip designs are a really important part of how smart phones and many other devices operate, and there are boardroom battles in progress, playing out at a time when the US is pressuring its allies more and more to pay attention to high tech transfers to China. Keep an eye on it.
And in other news, Trump’s opinion poll standing is plummeting and leaders around the world are increasingly focused on the question of how a post-Trump USA would act, to what extent the old US-led global alliance can be recreated and with what impact on the myriad problems the world is facing. This has no greater implication than for China, as Twitter indicated with its culling of vast numbers of accounts this week.
Have a good weekend.