China has itself to blame as time runs out for Tiktok

Linda J. Dodson

It was a misconcocted scheme from the start, but it is now deeply weird to think that less than a year ago a Hong Kong company made an attempt to take over London Stock Exchange Group.

Cast your mind back to the innocent pre-Covid days of September 2019, when HKEX shocked the City with a £30bn hostile bid for a British keystone of global financial infrastructure. The approach inevitably and swiftly failed for an array of financial and political reasons. LSEG boss David Schwimmer was left free to continue to pursue his own questionable megadeal with Blackstone for the data provider Refinitiv.

What makes this bizarre episode more incredible today is that the majority of HKEX’s board are appointed by Carrie Lam, the woman who runs Hong Kong on behalf of the Chinese Communist Party. This was widely remarked upon at the time as a serious problem for the bid, but today it is much worse than that.

As of this weekend Lam and 10 other senior officials in the territory are the target of US property seizures and financial assets freezing orders over their role in the crackdown on democracy activists. So in a parallel universe where Britain’s warm embrace of China continues under prime minister George Osborne and the HKEX bid for LSEG succeeded, the heart of the City is under the control of an individual subject to sanctions from our most important ally.

That would probably be a bit awkward, as the London Metal Exchange, which is already owned by HKEX in this universe, may soon discover.

Indeed, HSBC must be relieved that speculation that Laura Cha would be included in the list of sanctions targets proved off the mark.

She is a Hong Kong executive councillor and friend of Lam’s. As well as being a senior politician in the territory, Cha is a non-executive director of HSBC and chairman of the unit that operates its Asia-Pacific business. It seems a safe assumption that being a US sanctions target would probably not be compatible with a seat on the board of a global bank.

Notably, Cha is also chairman of HKEX and part of the brain trust that authorised that doomed tilt at LSEG. It’s a small world in Hong Kong, in which business and Chinese Communist Party politics are increasingly entangled.

But the fates of Hong Kong political elites and their offshore holdings are of relatively little importance next to the restrictions the Trump administration has ordered against Chinese companies. This is a pivotal moment for the West, in which foreign policy and industrial policy are being riskily mixed, as they are routinely in China.

Trump has given the viral video app TikTok, owned by Bytedance, and WeChat, a “super app” that offers everything from simple messaging to complex financial services and is owned by Tencent, 45 days to cease operations in the US unless they cut ties with their Chinese parents.

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