Category: China

China’s “Authoritarian Virus-Fighting Methods” Lead To Loss of Freedom and Scarcity of Food and Health Care

(p. A1) China’s ability to control the virus has come a long way since the pandemic started: It has inoculated nearly 1.2 billion people and set up a nationwide electronic health database for contact tracing.

Yet it has continued to rely on the same authoritarian virus-fighting methods from early 2020, including strict quarantines, border closings and lockdowns. These have led to food and medical shortages and growing questions about how much longer its zero-Covid strategy, the last in the world, can continue.

. . .

“The district security guards are like prison guards and we are like prisoners,” said Tom Zhao, a Xi’an resident. Mr. Zhao, 38, said he had joined dozens of chat groups last week searching for anyone who could help him find medicine for his mother, who has early-stage diabetes.

. . .

(p. A6) Xi’an has reported 1,800 cases in its latest outbreak, stunningly low compared with the daily case count in the United States. And as the world struggles to contain the spread of Omicron, in China officials have reported only a few local cases of the variant, and none in Xi’an.

The authorities are nevertheless worried, in a country that has stridently stuck by its zero-Covid policy — and held up its success fighting the virus as proof that its authoritarian style of leadership saves lives.

. . .

So far, the experiences have been grim. Tens of thousands of people have been relocated to centralized quarantine facilities to stop the spread. Several top city officials have been fired, and the head of Xian’s big data bureau was suspended.

On Tuesday, the vast health code system used to track people and enforce quarantines and lockdowns crashed because it couldn’t handle the traffic, making it hard for residents to access public hospitals or complete daily routines like regular Covid testing.

Many were incensed when a woman in the city, eight months pregnant, lost her baby after she was made to wait for hours at a hospital because she was unable to prove she did not have Covid-19. (The authorities responded by firing officials and requesting an apology from the hospital.)

Days into the lockdown, residents began to post on social media about how hard it was to get groceries or order food. After being reassured by officials that it was unnecessary to stock up, residents across the city were caught off guard when an initial policy allowing one member of each household to leave every two days was eliminated.

Officials later acknowledged the mistake and quickly posted images of volunteers delivering groceries. But by then, residents were already complaining online that officials had put the pursuit of eliminating the outbreak above the well-being of citizens.

Mr. Zhao, who moved in with his parents ahead of the lockdown to help take care of them, watched as their neighbors bartered for food. Several days ago, officials came in trucks to deliver vegetables, announcing their arrival on loudspeaker. Mr. Zhao and his parents received two plastic bags: a white radish, a head of cabbage, three potatoes, a carrot and two zucchinis.

They fared much better than others.

. . .

As the situation worsened across the city, people posted videos and heartfelt appeals for help. “SOS,” wrote one resident whose father could not get medical care when he suffered a heart attack. He later died, according to a post from his daughter, who shared the story on Weibo, a major social media platform in China.

Zhao Zheng, the father of an 8-year-old boy with acute lymphoblastic leukemia, found himself battling with staff at several hospitals in Xi’an after his son’s Dec. 28 appointment was canceled. Each hospital asked for proof that he was no longer in quarantine and documentation that Mr. Zhao and his family had not recently been exposed to the virus.

“Nobody could issue this document for us at all,” said Mr. Zhao, 43, who until recently had owned a small construction company.

For the full story, see:

Alexandra Stevenson. “China’s Latest Lockdown Leaves Residents Feeling ‘Like Prisoners’.” The New York Times (Friday, January 7, 2022): A1 & A6.

(Note: ellipses added.)

(Note: the online version of the story has the date Jan. 6, 2022, and has the title “China’s Latest Lockdown Shows Stubborn Resolve on Zero-Covid.”)

Chinese Social Media Attacks Walmart as Some Firms Reduce Investment in China

(p. A1) Walmart Inc., the world’s largest retailer, became the latest Western company to face scrutiny over its handling of business involving Xinjiang, following the passage of a U.S. law that virtually bans all imports from the northwestern Chinese region over forced-labor and human-rights concerns.

The Bentonville, Ark.-based retailer attracted anger on Chinese social media beginning last week after internet users shared comments that purported to show that Walmart had stopped stocking products from Xinjiang in its China-based Walmart and Sam’s Club stores.

. . .

Last week, U.S. semiconductor giant Intel Corp. issued an apology to Chinese consumers, partners and the public following an outcry on Chinese (p. A9) social media against the Santa Clara, Calif.-based company, which had published on its website a letter to suppliers asking them to avoid sourcing from Xinjiang.

. . .

Chinese social media campaigns are often not as organic as their overseas peers, as authorities and technology firms curate and censor domestic online content.

. . .

The American Chamber of Commerce in Shanghai said in September that 30% of retail and consumer companies polled in its most recent business survey cited public backlash and consumer boycotts as a top concern, the highest among the major industries covered by the business lobby. More than one-tenth of the companies said they had reduced planned investments in China because of concerns about consumer boycotts.

For the full story, see:

Liza Lin. “Walmart Draws Anger In China Over Xinjiang.” The Wall Street Journal (Tuesday, December 28, 2021): A1 & A9.

(Note: ellipses added.)

(Note: the online version of the story has the date December 27, 2021, and has the title “Walmart Sparks Public Outcry in China Over Products From Xinjiang.”)

Beijing University Bans Visiting Harvard Students from Singing the National Anthem on the Fourth of July

(p. A4) TAIPEI, Taiwan — Harvard University will move a popular Chinese-language program to Taipei from Beijing amid a broad chill in academic and cultural exchanges between the United States and China.

The program’s director, Jennifer L. Liu, told The Harvard Crimson that the move had been driven by a perceived lack of friendliness on the part of the Chinese host institution, the Beijing Language and Culture University.

. . .

. . . Professor Liu said that the program had been experiencing difficulties securing access to the classrooms and dormitories needed from Beijing Language and Culture University, according to an account she provided to The Harvard Crimson, a student newspaper. She also said that in 2019, the Chinese university told the program that it could no longer hold an annual gathering to celebrate the Fourth of July, during which students and faculty would typically eat pizza and sing the American national anthem.

Though China has instituted stringent pandemic restrictions, with provinces undergoing snap lockdowns as coronavirus cases have flared up, Professor Liu said she believed that the unwelcoming environment was related to a shift in the Chinese government’s attitudes toward American institutions.

. . .

The Harvard program’s relocation to Taiwan also comes as the island has supplanted Hong Kong as a bastion of free speech in the Chinese-speaking world, an idea that Taiwanese officials have been keen to emphasize.

Joanne Ou, a spokeswoman for Taiwan’s Foreign Ministry, said the agency “believes that the democratic and liberal system and pluralistic society will enable young American students to have a deeper understanding of Taiwan and the Chinese-speaking world.”

She added, “Only in a free environment where speech is not censored can the best results of learning be achieved.”

For the full story, see:

Amy Qin. “Chill in Beijing, Harvard Shifts Program to Taiwan.” The New York Times (Thursday, October 14, 2021): A4.

(Note: ellipses added.)

(Note: the online version of the story was updated Nov. [sic] 10, 2021, and has the same title “Amid U.S.-China Chill, Harvard Moves a Top Language Program to Taiwan.” The last three sentences quoted above, appear in the online version, but not in the shorter print version. Where there is a slight difference in wording between the two versions, the passages quoted above follow the online version.)

Most of Supply-Chain Delays Occur in U.S.

(p. A17) Mr. Levy, 53, says he doesn’t see the supply chain’s “unprecedented crisis” ending before 2023. He’s chief economist for Flexport, a San Francisco-based tech company for global-logistic services.

. . .

The typical transit time for a container in pre-pandemic days was 71 days, Mr. Levy says. That’s how long it took for a full container to depart from Shanghai; discharge in Los Angeles; proceed to a warehouse near, say, Chicago; get trucked empty back to California; and then return to Shanghai. The current transit time is 117 days or more. The greatest delays are in the U.S., owing to port bottlenecks and trucking shortages. The Los Angeles to Chicago leg, for instance, now takes 22 days, 12 more than before. It takes 33 days for the empty container to return to California, compared with 20 in the old days.

Not only does it take much longer to import goods, it’s also become eye-wateringly expensive. “Where it might have cost $1,500 to move a container across the Pacific,” Mr. Levy says, “you’re seeing them go for more like $15,000 per container.”

This surge in transport costs has hit lower-value goods hardest and made quick restocking all the more of a challenge. Mr. Levy talked to a company that sells office supplies. “They were moving a container whose contents were in the order of $15,000 in value. Well, if that now costs $15,000 to move, you have a problem, right?”

. . .

The key question: “When will we start seeing people behave the way they used to in their consumption?” It’s possible we won’t. “People are creatures of habit,” Mr. Levy observes, and the pandemic has led them to take on new habits. So far, at any rate, “we have not seen a reversion to the previous patterns.”

The supply-chain crisis, Mr. Levy contends, has no parallel in history. We’ve had shocks before, such as the oil crisis of 1973. But “global-trade liberalization and distributed specialization,” allied to an ease of shipping and transport, fueled by ideas like “just-in-time inventory”—that’s all new.

. . .

There are specific short-term measures that governments can take, such as liberalization of trucking rules, traffic control, land-use regulation for stacking containers and port-opening hours. But Mr. Levy is “loath to put a small subset of these forward as a panacea.”

For the full interview, see:

Tunku Varadarajan. “THE WEEKEND INTERVIEW; An Insider Explains the Supply-Chain Crisis.” The Wall Street Journal (Saturday, Dec. 18, 2021): A17.

(Note: ellipses added.)

(Note: the online version of the interview has the date December 17, 2021, and has the same title as the print version.)

“Overwhelmed” Volunteers Struggle to Fix Log4j Bug in Open Source Software

In Openness to Creative Destruction, I argue that open source software has severe drawbacks, compared to a system where firms receive higher profits for selling better software. The severe Log4j bug, discussed in the quoted passages below, is an example that strongly supports my argument. Blog entries posted on Dec. 17 and on Dec. 25 also discussed the Log4j bug.

(p. B6) Gary Gregory, a volunteer for the Apache Software Foundation, is spending time off from his day job glued to his computer, striving to help contain the harm from a security flaw in the Log4j tool underpinning much of the digital economy.

. . .

Mr. Gregory, who works from the dining-room table in his Ocala, Fla., home, fueled by black coffee and accompanied by his hound-pit-bull mix, Bella, said he is overwhelmed with hundreds of requests for help from businesses. While Apache is trying to assist companies in updating their systems, he said, the nonprofit’s resources are limited.

“This puts to the forefront the whole issue with open-source [software] and commercial users,” said Mr. Gregory, who is on the Apache Logging Services Project Management Committee of 16 elected members who vote on changes to the software. “The expectations are somewhat out of whack.”

. . .

Many developers rely on the free Log4j framework to help record data such as users’ behavior and applications’ activity in software built with the Java programming language. Cybersecurity experts say the inclusion of the open-source logging tool within so much interconnected software—often embedded without developers’ knowledge—yields a threat that spans economic sectors and national borders.

. . .

Cybersecurity firm Mandiant Inc. said it has observed Chinese government hackers trying to exploit the flaw.

After Apache released its planned patch on Friday, Mr. Gregory said he worked through the weekend on a new update along with other volunteer software developers in Japan, New Zealand, Virginia and Arizona. Unveiled Monday, the new version disabled a problematic software module by default and removed a message-lookup feature that could be used to exploit the flaw.

The Apache volunteers are designing another update to Log4j for users who rely on an older version of the Java programming language, meaning more work for Mr. Gregory while he is on vacation from his day job.

“That translates to me getting five hours of sleep last night,” he said of his time off. “Some of the other guys got two or three.”

For the full story, see:

David Uberti. “Fight Against Bug Relies on Volunteers.” The Wall Street Journal (Thursday, December 16, 2021): B6.

(Note: ellipses added.)

(Note: the online version of the story was updated Dec. 15, 2021, and has the title “Global Fight Against Log4j Vulnerability Relies on Apache Volunteers.”)

My book, mentioned above, is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

China Adds to Coal Use, While Already Burning More than Rest of World Combined

(p. B1) LINFEN, China — Desperate to meet its electricity needs, China is opening up new coal production exceeding what all of Western Europe mines in a year, at a tremendous cost to the global effort to fight climate change.

The campaign has unleashed a flurry of activity in China’s coal country. Idled mines are restarting. Cottage-sized yellow backhoes are clearing and widening roads past terraced cornfields. Long columns of bright red freight trucks are converging on the region to haul the extra cargo.

China’s push will carry a high cost. Burning coal, already the world’s single biggest cause of human-driven climate change, will increase China’s emissions and toxic air pollution.

. . .

China is expanding mines to produce 220 million metric tons a year of extra coal, a nearly 6 percent rise from last year. China already digs up and burns more coal than the rest of the world combined.

The effort is infused with patriotism. “Guarantee the supply” has become a national slogan, appearing frequently now in state media and official statements and even on red banners on the front of coal trucks.

. . .

(p. B4) Coal shortages were not China’s only electricity problem by September. A lack of rain in southwestern China meant hydroelectric dams generated less power. Calm skies in northeastern China meant wind turbines also contributed less.

Coal prices nearly doubled. Utilities, prevented from raising prices, began running power plants less. Blackouts followed as China’s factories ran flat out to meet strong demand. Heavy rains and flooding in Shanxi in early October briefly delayed China’s initial ability to dig extra coal. The Shanxi government said on Thursday [October 28, 2021] that all but four mines have reopened.

Officials have responded by partially deregulating electricity tariffs. Depending on the province, energy-intensive industries like steel or chemicals production now face cost increases of as much as 50 percent. That may prompt them to embrace energy efficiency, said Yan Qin, a lead analyst at Refinitiv, a data provider.

For the full story, see:

Keith Bradsher. “China Hurries to Burn More Coal, Putting Climate Goals at Risk.” The New York Times (Friday, October 29, 2021): B1 & B4.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the date Oct. 28, 2021, and has the same title as the print version.)

N.I.H. Funded EcoHealth Wuhan Research to Make Coronaviruses More Infective and Virulent

(p. A21) EcoHealth Alliance has come under scrutiny because of its collaboration on coronavirus research with researchers at the Wuhan Institute of Virology, which is situated in the city where the pandemic began.

. . .

Last month, The Intercept, an online publication, posted 900 pages of materials related to the N.I.H. grants to EcoHealth Alliance for the research. The materials provided details about experiments designed to provide new insights into the risk that bat coronaviruses have for sparking new pandemics.

In some of their experiments, the researchers isolated genes from bat coronaviruses that encode a surface protein, called spike. Coronaviruses use the spike protein to bind to host cells, the first step to an infection. The spike protein latches onto a cell-surface protein called ACE2.

According to the materials published, the researchers then engineered another bat virus, called WIV1, to carry spike proteins from other bat coronaviruses. They then conducted experiments to see if the engineered WIV1 viruses became better at attaching to ACE2 on cells.

. . .

Dr. Lawrence Tabak, the principal deputy director of the N.I.H., wrote in the letter to Representative Comer that the agency determined that the research proposed by EcoHealth Alliance did not meet the criteria for additional review . . .

. . .

Dr. Tabak noted that in one line of research, the researchers had produced mice genetically engineered to produce the human version of the ACE2 protein on their cells. Infecting these animals with coronaviruses could potentially provide a more realistic sense of the risk that the viruses have of infecting humans than just using dishes of cells.

The N.I.H. required that EcoHealth Alliance notify the agency if the engineered viruses turned out to grow 10 times faster or more than WIV1 would without their new spike proteins.

In some experiments, it turns out, that viruses did grow quickly.

“EcoHealth failed to report this finding right away, as required by the terms of the grant,” Dr. Tabak wrote.

The N.I.H. also sent Representative Comer a final progress report that EcoHealth Alliance submitted to the agency in August [2021].

In the report, the researchers describe finding that WIV1 coronaviruses engineered to carry spike proteins were more virulent. They killed infected mice at higher rates than did the WIV1 virus without spikes from the other coronaviruses.

The filing had been submitted late, the N.I.H. said, nearly two years beyond the grant-specified deadline of 120 days from completion of the work. “Delayed reporting is a violation of the terms and condition of N.I.H. grant award,” Renate Myles, a spokeswoman for the agency, said.

Jesse Bloom, a virologist at the Fred Hutchinson Cancer Center who has called for more research into the origins of the pandemic, said the revelations raised serious questions about the risks of investigating viruses originating from animals, known as zoonotic viruses.

For the full story, see:

Carl Zimmer and Benjamin Mueller. “N.I.H. Says Bat Studies Were Not Submitted Promptly.” The New York Times (Friday, October 22, 2021): A21.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story was updated October 28, 2021, and has the title “Bat Research Group Failed to Submit Virus Studies Promptly, N.I.H. Says.”)

Little Free Lithuania Stands Up to Big Bully Communist China

(p. A4) VILNIUS, Lithuania — It was never a secret that China tightly controls what its people can read and write on their cellphones. But it came as a shock to officials in Lithuania when they discovered that a popular Chinese-made handset sold in the Baltic nation had a hidden though dormant feature: a censorship registry of 449 terms banned by the Chinese Communist Party.

Lithuania’s government swiftly advised officials using the phones to dump them, enraging China — and not for the first time. Lithuania has also embraced Taiwan, a vibrant democracy that Beijing regards as a renegade province, and pulled out of a Chinese-led regional forum that it scorned as divisive for the European Union.

Furious, Beijing has recalled its ambassador, halted trips by a Chinese cargo train into the country and made it nearly impossible for many Lithuanian exporters to sell their goods in China. Chinese state media has assailed Lithuania, mocked its diminutive size and accused it of being the “anti-China vanguard” in Europe.

In the battlefield of geopolitics, Lithuania versus China is hardly a fair fight — a tiny Baltic nation with fewer than 3 million people against a rising superpower with 1.4 billion. Lithuania’s military has no tanks or fighter jets, and its economy is 1/270th the size of China’s.

But, surprisingly, Lithuania has proved that even tiny countries can create headaches for a superpower, especially one like China whose diplomats seem determined to make other nations toe their line.

. . .

In an interview, Gabrielius Landsbergis, the foreign minister, said the country had a “values-based foreign policy” of “supporting people supporting democratic movements.”

Other European countries declaring fealty to democratic values have rarely acted on them in their relations with China. Mr. Landsbergis’s party, however, has made action part of its appeal to domestic voters: Its pre-election manifesto last year included a promise to “maintain the value backbone” in foreign policy “with countries such as China.”

. . .

From China’s perspective, last week’s release of a report on the Chinese-made cellphones by Lithuania’s Defense Ministry Cyber Security Center was yet another provocation. The hidden registry found by the center allows for the detection and censorship of phrases like “student movement,” “Taiwan independence,” and “dictatorship.”

The blacklist, which updates automatically to reflect the Communist Party’s evolving concerns, lies dormant in phones exported to Europe but, according to the cyber center, the disabled censorship tool can be activated with the flick of a switch in China.

The registry “is shocking and very concerning,” said Margiris Abukevicius, a deputy defense minister responsible for cybersecurity.

. . .

Lithuania has made “a clear geopolitical decision” to side decisively with the United States, a longtime ally, and other democracies, said Laurynas Kasciunas, the chairman of the national security and defense committee. “Everyone here agrees on this. We are all very anti-communist Chinese. It is in our DNA.”

For the full story, see:

Andrew Higgins. “A Minnow (Pop.: 3 Million) Defies a Whale (Pop.: 1.4 Billion).” The New York Times (Friday, October 20, 2021): A4.

(Note: ellipses added.)

(Note: the online version of the story was updated October 8, 2021, and has the title “Lithuania vs. China: A Baltic Minnow Defies a Rising Superpower.” Where the wording differs between the versions, the quotations above follow the online version.)

Communist China Pays World Bank for Higher Ranking in “Doing Business” Report

(p. A1) The World Bank canceled a prominent report rating the business environment of the world’s countries after an investigation concluded that senior bank management pressured staff to alter data affecting the ranking of China and other nations.

The leaders implicated include then World Bank Chief Executive Kristalina Georgieva, now managing director of the International Monetary Fund, and then World Bank President Jim Yong Kim.

The episode is a reputational hit for Ms. Georgieva, who disagreed with the investigators’ conclusions. As leader of the IMF, the lender of last resort to struggling countries around the world, she is in part responsible for managing political pressure from nations seeking to advance their own interests. It was also the latest example of the Chinese government seeking myriad ways to burnish its global standing.

(p. A10) The Doing Business report has been the subject of an external probe into the integrity of the report’s data.

. . .

The World Bank was in the middle of difficult international negotiations to receive a $13 billion capital increase. Despite being the world’s second largest economy, China is the No. 3 shareholder at the World Bank, following the U.S. and Japan, and Beijing was eager to see its power increased as part of a deal for more funding.

In October 2017, Ms. Georgieva convened a meeting of the World Bank’s country director for China, as well as the staff economists that compile Doing Business. She criticized “mismanaging the Bank’s relationship with China and failing to appreciate the importance of the Doing Business report to the country,” according to the investigative report’s summary of the meeting.

. . .

Ultimately, the team identified three data points that could be altered to raise China’s score, the investigative report said. For example, China had passed a law related to secured transactions, such as when someone makes a loan with collateral. The World Bank staff determined it could give China a significant improvement to its score for legal rights, citing the law as the reason.

World Bank employees knew the changes were inappropriate but “a majority of the Doing Business employees with whom we spoke expressed a fear of retaliation,” the investigative report said.

Although the data-gathering process for the 2018 report was finished, the World Bank’s economists reopened the data tables and altered China’s data, the investigative report said. Instead of ranking 85th among the world’s countries, China climbed to 78th due to the alterations.

For the full story, see:

Josh Zumbrun. “World Bank Cancels Report After Investigation.” The Wall Street Journal (Friday, Sept. 17, 2021): A1 & A10.

(Note: the online version of the story has the date September 16, 2021, and has the title “World Bank Cancels Flagship Report After Investigation.”)

Chinese Communists Know How to Replicate and Mimic But Not How to Create

(p. A21) Taiwan is an austere rock in a typhoon-laden sea with 24 million people. But this little island has — by universal acclaim — the most sophisticated microchip manufacturer in the world, Taiwan Semiconductor Manufacturing Company, or TSMC.

About 100 miles away, across the straits, is mainland China, with 1.4 billion people. Most are the same ethnicity, speak the same language and eat the same food as the people of Taiwan. But they have never been able to master the manufacture of the most advanced logic chips that TSMC makes.

. . .

TSMC is a semiconductor foundry, meaning it builds the chips that lots of different companies design — particularly Apple, Qualcomm, Nvidia, AMD and even Intel. Over the years, TSMC has built an amazing ecosystem of trusted partners that share their intellectual property with TSMC to build their proprietary chips. At the same time, leading tool companies — like America’s Applied Materials and the Netherlands’ ASML — are happy to sell their best chip-making tools to TSMC. This ensures that the company is always on the cutting edge of the material science and lithography that go into building and etching the base of every semiconductor.

I used to worry that Xi’s big idea — “Made in China 2025,” his plan to dominate all the new 21st-century technologies — would leave the West in the dust. But I worry a little less now.

. . .

And everything that Xi is doing — from Australia to Taiwan to Jack Ma — is driving them away. As one U.S. chip executive said to me of Xi, “The Chinese have replicated and mimicked,” but they have never created the kind of ecosystem like TSMC’s, “because there is no trust.”

For the full commentary, see:

Thomas L. Friedman. “China Is Becoming a Real Danger.” The New York Times (Wednesday, October 20, 2021): A21.

(Note: ellipses added.)

(Note: the online version of the commentary has the date October 19, 2021, and has the title “China’s Bullying Is Becoming a Danger to the World and Itself.” The passages quoted above are in both the online and print versions. The ellipses are appropriate for the print version, but would be slightly different for the online version because it has some additional passages that are not quoted above.)

Ray Dalio Lacks Principles in His Kowtowing to Chinese Communism

Ray Dalio has authored a book called Principles, but that does not imply that he has any. See the story below.

(p. B1) This year has been unsettling for Chinese business. The ruling Communist Party has gone after the private sector industry by industry. The stock markets have taken a huge hit. The country’s biggest property developer is on the verge of collapse.

But for some of the biggest names on Wall Street, China’s economic prospects look rosier than ever.

BlackRock, the world’s biggest asset manager, urged investors to increase their exposure to China by as much as three times.

“Is China investable?” asked J.P. Morgan, before answering, “We think so.” Goldman Sachs says “yes,” too.

Their bullishness in the face of growing uncertainty has puzzled China experts and drawn criticism from a wide political spectrum, from George Soros, the progressive investor, to congressional Republicans. Mr. Soros has called BlackRock’s stance a “tragic mistake” that’s “likely to lose money” for its clients and would “damage the national security interests of the U.S. and other democracies.”

. . .

(p. B5) Ray Dalio, founder of the hedge fund Bridgewater, wrote in late July [2021] that people in the West should not interpret Beijing’s crackdowns as “the Communist Party leaders showing their true anticapitalist stripes.” Instead, he wrote, the party believed those moves were “better for the country even if the shareholders don’t like it.”

The relationship has been good to Bridgewater so far. Mr. Dalio’s firm has raised billions of dollars from Chinese clients such as the China Investment Corporation, the sovereign wealth fund, and State Administration of Foreign Exchange, which manages the country’s currency reserves. (Bridgewater declined to comment.)

This is a balance that business has played with China for a long time: Say nice things to Beijing, lobby back home on China’s behalf, then ask for access to markets and capital.

Goldman Sachs became the first foreign bank to seek full ownership of a securities business in China in December. BlackRock, which describes China as an “undiscovered” market, hired a former regulator to head its China business. So many global financial firms are expanding in the country that there’s a talent war.

. . .

The Wall Street firms are apparently betting that China’s past successes will continue. They have a long track record on their side, but they would do well to remember what they constantly tell their customers: Past performance isn’t necessarily indicative of future results.

For the full commentary, see:

Li Yuan. “Uncertainty Is Rocking China. Why Is Wall Street Bullish?” The New York Times (Saturday, October 7, 2021): B1 & B5.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the commentary has the date Oct. 6, 2021, and has the title “China is Rocked by Uncertainty. Why is Wall Street Bullish?”)