It is paradoxical that just as China is allowing its people to invest in American tech stocks, thanks to the creation of a Nasdaq 100 Index Exchange Traded Fund in China, it will be harder for Chinese to use or buy the technologies and media these US companies sell. The Guotai fund management group, with Nasdaq, has created the new listed exchange-traded fund which will be traded in renminbi in China. This will offer an opportunity to invest in such stock as Microsoft, Apple, Starbucks, Yahoo, and Baidu, all known in China.
But it also will give Chinese access to the stocks of E-Bay, Virgin Media, and Google, although these companies’ products are not now normally accessible to mainland Chinese in their global form. Google is the most politically sensitive. Having (after 4 years of compliance) changed tack to cease limiting access to certain words offensive to Beijing officialdom, GOOG linked up searches for them to its uncensored Chinese-language services in Taiwan and Hong Kong. The result was that access to the entire Taiwan service was cut off for mainland Chinese. Hong Kong is still up but not for mobile web or video search, and other partnership deals with Chinese firms, which are still censored.
So Chinese can buy Google stock but not freely use the service. And the ETF will suffer under the Beijing-induced anti-Google barrage by Chinese netizens. Currently Chinese can only buy GOOG in the Guotai ETF, which means they cannot short GOOG to buy BIDU, as non-Chinese investors have. But it would be useful to guess which way the Chinese Mr. Market would play this dispute.
Another paradox. While the European Union cannot get its act together to figure out what to do within the Euro block to deal with Greece or Fitch Ratings‘ newly downrated Portugal, financial criminals in Europe have fine cross-border ties. The latest 6 British arrests were over insider trading by the US-based Moore Capital Mgm. The Financial Services Authority has already taken into custody employees of Moore (a Brit), Deutsche Bank and the Exane brokerage sub of France’s BNP Paribas.
Then the British Serious Fraud Office cracked down today on Alstom which is French.
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