THE following companies saw new developments that may affect trading of their securities on Wednesday (May 29):

Singtel : Z74 0%: The telco is part of a consortium poised as a frontrunner to buy a minority stake worth US$1 billion in ST Telemedia Global Data Centre (STT GDC), one of Asia’s biggest data centre providers, two sources with knowledge of the matter told Reuters. The consortium, which consists of US firm KKR and Singtel, aims to acquire up to 20 per cent of STT GDC. Shares of Singtel closed 1.2 per cent or S$0.03 higher at S$2.46, before the news on Tuesday. 

Lippo Malls Indonesia Retail Trust : D5IU 0% (LMIRT): Its manager announced on Wednesday that LMIRT has obtained a loan facility of up to 2.5 trillion rupiah (S$209.5 million). About 2.3 trillion rupiah of the proceeds will be used to prepay the trust’s Singapore dollar-denominated secured bank loans in June. The counter closed flat at S$0.012 on Tuesday.

FOR most of his 30 years running a Chinese-owned company in the United States, Ni Pin felt welcomed.

He set up auto parts maker Wanxiang America – a unit of a Chinese conglomerate founded by his late father-in-law – in Chicago back in 1994 when he was studying for a PhD. The company came to supply parts for half of all cars made in America and employ around 10,000 people. In 2002, Illinois named Aug 12 “Wanxiang Day” in recognition of its contribution to the local economy.

But Wanxiang America now finds itself caught up in a wave of anti-China sentiment. Ni said he had three deals worth billions of US dollars fall apart in the past few years because of worries about geopolitical risks or delays from foreign investment reviews.

“Business partners don’t feel comfortable to deal with a company that has a Chinese background because they feel that sooner or later they are going to have a government issue,” Ni said. “Major business opportunities were killed by those concerns.”

As lawmakers in Washington place closer scrutiny on TikTok and other Chinese-linked technology companies over national security threats, the experience of Wanxiang shows that suspicion has seeped into much less contentious sectors.  

A Washington-based lawyer who represents Chinese clients said an increasing challenge is how every Chinese industry is being pulled into a national security narrative. It does not matter if it’s mining or health care, even Chinese furniture could one day be seen as a national security issue, said the lawyer, who asked not to be identified discussing a sensitive topic.

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US officials worry that Chinese regulations can force local companies to surrender information gathered in America. They also cite concerns about supply chain security, espionage and the absence of equal treatment from Beijing, which restricts foreign investment in certain sectors, as reasons to increase scrutiny of Chinese firms.

Ni, who’s also chairman of the China General Chamber of Commerce Chicago, said members are very worried about how difficult the business environment has become and question if Chinese companies are still welcome in the US.

Chinese investments in the US have trailed behind smaller economies such as Spain and Singapore in recent years, according to the US Bureau of Economic Analysis, with China’s own efforts to limit “irrational” outbound investment also contributing to the steep drop. Chinese firms hired almost 140,000 Americans as of 2021, down 40 per cent from a peak five years prior and a fraction of the workers employed by Germany and Japan, according to US government data.

“We used to be like a panda – no harm, very cute, can help people save money and create new jobs,” Ni said. “Now, I hate to say this, we are more like the skunk, and people don’t want to get too close.”

Chinese companies are bracing for even tougher times ahead as Joe Biden and Donald Trump gear up for a rematch in the November presidential election. Both are taking a hard line on Beijing to win over voters worried about trade, national security and safeguarding jobs.

Biden has already unveiled sweeping tariff hikes on a range of Chinese imports, the culmination of a review of the trade measures under Trump, and accused Chinese firms of stealing, cheating and dumping underpriced goods into international markets. Last month, he signed legislation requiring TikTok to be sold by its Chinese parent ByteDance or face a ban in the country.

“There’s of course an immediate blow to relations from US actions against Chinese firms,” said Christopher Beddor, deputy China research director at Gavekal Dragonomics. “But there’s also a more long-term and indirect cost: geopolitical tensions are chipping away at cross-border business, which ultimately lowers the guardrails to a further worsening of geopolitical tensions ahead.”

Proposals from Chinese firms that were once welcomed for creating jobs have been halted or delayed, including plans to build a corn mill in North Dakota and an electric vehicle battery components plant in Michigan. Farmers protested the latter in tractors adorned with American flags and signs saying “No Commie” or “No CCP”, a shorthand for China’s ruling Communist Party.

China for its part has rolled out retaliatory measures, including an “anti-foreign sanctions” law in 2021, although its response so far has primarily consisted of symbolic sanctions on US companies with little exposure to the Chinese market. It has also tightened foreign access to sensitive information by passing a new counter-espionage law last year, increasing risks for foreign firms.

“The critical question now is how much pain each side is willing to endure and whether short-run pain means a long-term competitive advantage in future technology battles,” said Ren Liqian, director of Modern Alpha at WisdomTree, a New York-based asset management firm. While the impact on the US economy may be minor in the short term, it will impact America’s direct access to Chinese expertise in the long run, she added.

Some American companies are seizing on the anti-China sentiment to gain an edge over their competitors, linking them to China and lobbying the government to sanctions those firms, according to a Washington-based communications strategist, who asked not to be identified as speaking on client matters.

A Bloomberg report in January revealed that Dell Technologies and Micron Technology funded a research and advocacy group called China Tech Threat, which has consistently painted laptops by Lenovo – one of Dell’s biggest competitors – as nefarious tools of the Chinese state, allowing potential entry points for cyberespionage.

As firms seek to mitigate geopolitical risks, some have tried to shed their China affiliations. Many Chinese firms contemplating operations in the US ask if they should set up their businesses in Singapore or America first because they fear they won’t be treated fairly otherwise, said Chris Pereira, chief executive officer of consultancy iMpact.

One employee at a US-listed firm said while the company is headquartered in Singapore to avoid being caught up in US-China tensions, it still largely operates out of China. It dispatches staff to work in Singapore on short-term stints, said the person, who asked not to be named as the information is private.

A study by Pew Research Center found that more Americans now see China as an “enemy”, and most believe that reducing Beijing’s power and influence should be a top foreign policy goal. As the US presidential election approaches, candidates are expected to align with this view.

“For politicians, there’s no cost in using the China topic to achieve their own goals,” Ni said. “I compare the China topic to ketchup. It’s free, easy to get, and everybody can use it.” BLOOMBERG