As we reported in the Geopolitical section of this Trends Journal, as evidenced by the recent meeting with U.S. and Chinese government officials, Beijing will not take orders or follow rules set by Washington. (See or 23 March article, “CHINA TELLS U.S TO FU.”)
And, as we have forecast, the 20th century was the American century – the 21st century will be the Chinese century. The business of China is business; the business of America is war.
CHINA, IRAN SIGN MAJOR ECONOMIC AND MILITARY COOPERATION DEAL. On 27 March, the foreign ministers of China and Iran signed the 25-year Comprehensive Strategic Partnership, in which China has agreed to invest $400 billion in Iran in exchange for access to Iran’s oil supplies.
The pact covers a range of other issues, including agriculture, cultural exchange, manufacturing, mining, tourism, and transportation.
The two nations also will share military training, research, and intelligence, according to The New York Times.
The deal has been in negotiations since Chinese president Xi Jinping visited Tehran in January 2016 and is Iran’s largest-ever international cooperation agreement.
In 2001, Iran signed a compact with Russia to cooperate in nuclear development. That treaty is scheduled to end this year. Iran and China participated with Russia in a naval exercise in the Indian Ocean in 2019.
China is Iran’s chief trading partner, with about $20 billion in goods and services exchanged annually between the two countries. The trade peaked at $52 billion in 2014 but has waned since due to sagging oil prices and international sanctions imposed against Iran in 2018 because of its efforts to build nuclear weapons.
TREND FORECAST: The China-Iran deal voids any leverage the U.S. and its allies have to enforce the international agreement limiting Iran’s development of nuclear weapons. China can not only replace the West as a customer for Iranian oil – its chief export – but also can supply Iran with virtually all of the goods the West is withholding from Iran under the sanctions.
Backed by China, Iran is preparing to host direct talks between Israel and the Palestinians, the NYT reported. Israel is unlikely to take part in discussions hosted by one of its most bitter enemies, but Iran’s offer signals its sense of its growing power in the region that its new ties to China have given it.
The China-Iran compact marks a new expansion of China’s international power and reach and a weakening of U.S. influence. As we have forecast: The 20th century was the American century, the 21st will be the Chinese century.
CHINESE CITIZENS PROTEST WESTERN BAN ON XINJIANG COTTON. In the wake of February’s U.S. ban on cotton fabric and clothing made in the Chinese province of Xinjiang, Chinese consumers are lashing out with boycotts of their own against Adidas, Nike, Swedish clothing maker H&M, and other western companies.
The U.S. ban was imposed following evidence that Xinjiang’s cotton was produced by enslaved Uighurs, a Moslem minority that the Chinese government has been accused of trying to exterminate.
In March 2020, the U.K.-based Business and Human Rights Centre named 83 major Chinese brands it said were benefiting directly or indirectly from Uighur slave labor.
Last week in China, the hashtag #ISupportXinjiangCotton garnered 4.5 billion Internet views and sparked 28 million discussions.
“All foreign companies must get out of China,” one person commented.
“China’s national interests are greater than all,” another wrote.
More than 30 Chinese celebrities have ended their endorsements of Nike and Adidas. Renmin University in Beijing has removed Nike’s logo from its athletic fields. Nike’s logo on the shirt worn by an actor in a popular television drama was blurred out.
Social media sites show videos of people slashing H&M clothing and burning Nike shoes while shouting, “I won’t let you rumormongers grab my money any more!”
Western officials dismissed the protests as being organized and mandated by the Chinese government. However, this time the grassroots outrage is spontaneous, the Global Times reported, citing comments from inside observers.
Chinese nationalism has grown with the country’s rise as a major power, the GT noted, and the government is allowing the public to be the face of protest in this case while Beijing works to maintain smooth government-to-government relations with the West.
H&M: DISPARAGE CHINA, LOSE BUSINESS. H&M, the world’s second-largest clothing retailer, faced severe backlash in China and calls for a boycott after a statement the company made about Xinjiang back in September emerged on a Chinese social media site.
The ruling Communist Party last week posted a statement from the Swedish company that said it was “deeply concerned” about reports of forced labor to produce cotton in the country’s western region.
The Associated Press, citing foreign governments and researchers, reported there could be more than a million Uyghurs and others confined to detention camps in Xinjiang.
The statement from H&M has been a source of anger for many on social media in the country and even prompted some national celebrities to denounce the company. CNN reported that Huang Xuan, an actor who was a brand ambassador for the clothing store, announced he would no longer work for the company.
China’s Communist Youth League also condemned the H&M statement, saying, “Spreading rumors to boycott Xinjiang cotton while trying to make money in China? Wishful thinking!”
The Wall Street Journal reported the post was shared 30,000 times.
H&M was forced to issue a statement and said the comment did not “represent any political position.”
“H&M Group always respects Chinese consumers. We are committed to long-term investment and development in China,” the statement read. That did not stop stores across the country from being shuttered and its 500 locations being removed from the Apple map.
The CNN report said that a short time after H&M was forced to try and put out its PR fire, Nike was also ensnared by the social media mob in the country.
The report pointed out Nike said in a statement a year ago that it “does not source products from [Xinjiang] and we have confirmed with our contract suppliers that they are not using textiles or spun yarn from the region.”
TREND FORECAST: H&M, Nike... name the company that is doing business in China and watch how each one that wants to expand its market share in the nation of 1.4 billion people will bow down and suck up to Communist China’s demands and not criticize its government.
It is estimated that over the next nine years, more than 70 percent of China’s population will be middle class, consuming nearly $10 trillion in consumer goods and services.
TRENDPOST: For any reader of this magazine, the swift backlash that H&M and Nike faced by the Chinese public should not be a surprise. VOA News reported that shortly after the tense U.S.-China talks in Anchorage earlier this month, quotes from the country’s top diplomat, Yang Jiechi –who squared off with U.S. Secretary of State Antony Blinken – have been appearing on handbags, umbrellas, and mobile phone cases. The report pointed to a tote bag that reads, “The U.S. is in no position to talk down to China,” which can be yours for $13.
On 3 November, we ran the article, “CHINA’S SURGE IN NATIONALISM RAISES CONCERN.” The report pointed out that in 2018, Yu Zhengsheng, a top Chinese official, told the annual Chinese People’s Political Consultative Conference that patriotism has been a top priority.
The AP said President Xi Jinping’s goal was to “mobilize all the sons and daughters of [ethnic Chinese] to work together for the greater national interests and the realization of the Chinese Dream” – to be the world’s top power.
As Gerald Celente has long noted, “The 20th century was the American century, the 21st century will be the Chinese century. The business of China is business, the business of America is war.”
And, as we have been reporting, while America and Europe have outsourced their manufacturing to China and developing nations to increase profit margins, China’s dual circulation/self-sustaining economic model is directed toward keeping jobs and trade and profits within the nation, thus relying less on global trade.
We also see how companies are forced to bow to China because of its vast market. China is H&M’s fourth-biggest market and has been removed by major e-commerce and service apps in the country simply for saying it has “deep concern” about reports of camps that contain Uyghurs where human rights abuses have occurred. China insists these are “job training” facilities. The European Union, Britain, Canada, and the U.S. have imposed sanctions on Chinese officials over these reports.
HSBC’S ROAMING BANKERS DRUM UP CHINA BUSINESS. British financial giant HSBC is letting out a squad of footloose financial planners in the Chinese coastal cities of Guangzhou, Hangzhou, Shanghai, and Shenzhen to track down potential wealthy customers and offer them banking, insurance, and investment services.
Instead of offices and desks, the roaming bankers will have digital tablets.
The venture, dubbed HSBC Pinnacle, will operate from a digital platform in Shanghai. The company says it is the first to be licensed by China for such a venture.
Pinnacle is a key pilot project in the bank’s three strategies to spur its sagging fortunes: focusing on Asia, specializing in wealth management, and generating more income through fee-based services and less through lending.
China’s middle class in need of such services will number 600 million people by 2028, almost twice the entire current U.S. population, the bank calculates.
Initially, HSBC’s team will seek out individuals with at least $100,000 to invest, a market already crowded by AIA Group, China Merchants Bank, Goldman Sachs, JPMorgan Chase, and other domestic and international institutions.
HSBC’s advantage: “We believe the right way to engage is a digital and people-blended service,” Trista Sun, Pinnacle’s chief, told the Wall Street Journal.
Competition will be stiff.
"The American financial services industry is cleaning up in China," Sherard Cowper-Coles, HSBC's public relations chief, commented to the WSJ. “The big American banks [and] investment houses are making huge progress.”
However, HSBC has advantages others don’t.
The bank was founded in Shanghai in 1865, in 1984 became the first foreign bank to be licensed to operate on the mainland, and has 160 branches throughout the country. About a quarter of HSBC’s 226,000-person workforce is in China.
HSBC’s personal banking and wealth management division lost $34 million on the mainland last year while earning $4.93 billion in profit in Hong Kong.
Pinnacle is an effort not only to correct that deficit but to make the division the bank’s signature operation in China.
TREND FORECAST: HSBC sees the future in China as does the big business of the world. Considering its Hong Kong roots and Asian connections, the company is well-positioned to gain a greater banking share from the mainland and Asian nations.