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The financial world vs China

Financial world vs China

The United States is preparing to deliver a powerful blow to the finances of Chinese companies.

In addition to restrictions on investment by Chinese companies within the United States, a package of measures is being prepared to block financial flows into the Chinese business itself. The precedent was set by Nasdaq exchange delisting of the Chinese company Luckin, for violation of financial statements.

However, according to observers, such violations, if desired, can be found in almost all Chinese companies operating in the United States. Moreover, in order to stay on the exchange, a Chinese company must confirm that it is not affiliated with a foreign government. For Chinese international companies, which in one way or another, almost all are connected with the Chinese government, this task is impossible.

Accordingly, even companies such as the Alibaba Group may undergo delisting. It is unclear whether the United States will be able to force other countries to delist Chinese companies, but such negotiations are already underway. In response, China invites international financial companies to conduct business on its territory and is developing a package of measures to attract such companies to the country. Experts dubbed this financial confrontation - financial nationalism. If the restrictions on investment in and from China gain full strength, this will lead to a global economic split between China and the rest of the world.

This can inflict a terrible blow on the entire international business and make it look for alternative ways of development.

For example, Japan introduced new legislation that limits the investment of all foreign companies in Japan and vice versa, and this applies to any foreign companies, not just Chinese ones. Obstacles to investment in and from China may be a rational solution in the current situation, but financial nationalism towards other countries should be stopped or a catastrophe will be inevitable.

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