UK-based index provider FTSE Russell announced the removal of shares of eight Chinese firms which have been blacklisted by the White House. Market concerns have been raised that it may signal a financial cold war as some financial institutions follow the Trump-led US authority to irrationally politicize economic or financial operations.
Following an executive order signed by US President Donald Trump last month to ban US capital from investing in Chinese firms under a disguise of "military-related", FTSE Russell, a subsidiary wholly owned by the London Stock Exchange Group, decided to drop shares in companies such as Hangzhou Hikvision and China Railway Construction Co, according to Reuters.
Based on a groundless political judgment of the US, such moves from UK financial institutions echoing Washington's intervention in normal operations of financial markets will hurt global investors, especially from the US and Europe.
With the Trump administration set to leave the White House on Jan 20, 2021, it has spared no efforts trying to deepen its cold war mentality-guided policies across the world. Though the uncertainty caused by the Trump administration may see escalations before his departure, it is believed that the US President-elect Biden will not adopt Trump's irrational path to further heat up the uncertainties.
Essentially, all moves trying to politicize normal operations of markets are double edged swords which will hurt all involved parties. In fact, international index providers, including the FTSE Russell, had been increasing the involvement of Chinese shares in recent years as the Chinese economy shows rosy prospects with strong resilience under the gloomy global economy.
Undermining shares of high-potential Chinese firms will cast shadows on the global market and cause tangible costs for international investors.
Recently the UK, and even the EU, have shown trend of further tilting toward the US and hyping the so-called "China challenge", however, being trapped by the US' policy is not in line with Europe's essential interests.
European countries have been underlining their strategic autonomy and upholding of multilateralism and opening-up, which clearly goes against group politics or gathering cliques among the international community, China's Vice Foreign Minister Le Yucheng said at a forum on Saturday.
China-Europe relations are of independent value and should not be subordinate to relations between any major powers, Le said, stressing that it is hoped that Europe will uphold the spirit of strategic autonomy, establish a foreign policy framework based on cooperation, and approach major-country relations and China-Europe relations with a broad vision.
China and Europe are located at opposite ends of the Eurasian continent. If the two sides could develop side by side, it will bring benefits to the Eurasian continent and even the whole world, Le noted.
The article was compiled based on an interview with Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies of Renmin University of China.