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Zhigang Tao
Zhigang Tao
Zhigang Tao is HSBC Professor in Global Economy and Business Strategy and director of the Institute for China and Global Development, the University of Hong Kong. His research focuses on the growth dynamics of the Chinese economy, multinational strategy in China, and the integration of China with the global economy.

Given geopolitical pressures, a split would protect HSBC’s hugely profitable Hong Kong and mainland business, while letting its global banking business proceed with fewer regulatory burdens and better financial discipline.

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The city must move on from the ‘front shop, back factory’ model built around low-cost production in China. It should aim at becoming a base for mainland firms managing global operations, and also develop products targeting the mainland market.

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If the new law is similar to the European Union’s ‘blocking statute’ it may force companies to choose between the US or the Chinese market or motivate them to lobby the US to lift sanctions on China.

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Just as McDonald’s retains some company-owned stores for brand-building, the Chinese government maintains state-owned enterprises to ensure social stability.

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Trump is hurting American firms that have outsourced to China in the hope of bringing manufacturing back to the US. China has to give American firms reasons to stay.