Several Wall Street firms that recently attempted to expand asset management operations into China are now facing financial difficulties in their efforts to capitalize on the market.
According to the Daily Caller, one such firm that turned to China for additional profits is the infamous far-left investment company BlackRock. However, even the mega-corporation is struggling, coming in at 145th out of nearly 200 Chinese mutual funds. Other firms that rank even lower include Fidelity Investments and Neuberger Berman.
Other banks with poor performances in China include Goldman Sachs, Morgan Stanley and JP Morgan Chase, which all saw revenue drops in their respective Chinese investments last year. BlackRock first raised about $917 million for its Chinese fund in 2021, before seeing the fund shrink by 47% by the end of June.
Some of the reasons for the dramatic underperformance of American companies include local Chinese companies’ reluctance to turn to American investment banks, as well as numerous international restrictions on trade between Chinese and American companies, and an overall sluggish Chinese economy.
Meanwhile, many other American companies are choosing to withdraw operations from China altogether, particularly automakers, due to ongoing international tensions and COVID-19 restrictions that remain in place within China and thus limit productivity. Another company that severed ties with China is Apple, which instructed its manufacturing partner Foxconn to relocate to Vietnam instead of China.
One of the most recent restrictions enacted on China was in early August, when the Biden Administration banned American private investment companies from investing in several Chinese companies related to the production of semiconductors, quantum computing, and artificial intelligence.
On Friday, Chinese regulators announced new measures to reverse their economic decline, including cutting trading costs, promoting share buybacks, and encouraging long-term investment.