Labyrinthine architecture makes matters worse for China sanctions

In geoeconomics, sanctions make matters worse for the victim and sometimes even to the imposing nation. In the case of China sanctions America got herself painted into a corner. The aggravation is accelerated due to the labyrinthine architecture of the sanctions regime:

Scott Ritter a geoeconomics analyst says “Sanctions are lazy man’s tools”. The history of Anti - China sanctions proves his statement. There has never been a consistent policy of imposing sanctions and evaluating its effect afterwards. Besides, the architecture and the steps taken in order to improve the tempo of severity over victim was never a clear cut affair. Here is the list of sanctions against China made under different authorities proving how haphazard America is in the sanctions game!

1. In May 2019 Dept. of Commerce under Export Administration Regulations, citing security concerns emanating from supplying technology and related services to Iran by Chinese companies banned Huawei, ZTF and 70 subsidiaries/associates of the former. This blanket ban not only restricted US companies dealing with them but threw the entire techno industry to chaos

2. In August 2019 US Treasury declared China as currency manipulator

3. Trump administration issuing Executive Order, imposed sanctions against Chinese officials barring them from entering into USA and freezing their assets in USA. These were targeted specifically against Chen Quanguo Politburo member of the Chinese Communist Party (CCP) who was functioning as Secretary in Xinxiang and his deputy Zhu Hailun.

4. In August 2020, Chief Executive of Hong Kong, Carrie Lam was sanctioned citing undermining democracy in Hong Kong and was added to blocked persons list. This was done by the US Treasury. Ten other official were also included in this wide ranging ban. Moreover, in December 2020, 14 vice chairmen of National People’s Congress of China (NCCP) in Beijing were corralled under the ban net. The latter action added insult to injury as NCCP is a forum representing people of China similar to that of US Senate

5. Finally an Executive order issued by President Trump prohibited US investors from transacting in securities related to Chinese companies that are suspected to have connections with Chinese military by the Dept. of Defence. As of January 2021 44 such companies in New York Stock Exchange (NYSE) were identified as culprits.

The casting of this wide net killed enthusiasm of investor community. Prohibition is now extended even to stock exchange which is a pillar of US capitalism. What is more 5 of the companies must be delisted from the NYSE by November 2021. Wither American capitalism!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist