China Deepens Financial Tentacles

China is patient and waits for the right time.  Most everyone knows this, given our experience with Hong Kong and the East/South China Sea, but this case is different.  It involves the expansion of Alipay into the rest of world's markets, where it has no business being, especially where it involves the US.  Today's Wall Street Journal article is looking at Ant Financial and WeChat as competitors in global, mobile payment systems.  We should remember that Ant is a Alipay spin-off from Alibaba, and a most peculiar one at that.  Yahoo! Owned them once, but when the Chinese Central Government decided it was not a good idea to allow a foreign company to own any mechanism that might control China's people through debt, they forced the sale of it - without telling Yahoo! - which at the time, owned 40% of its stock.  As I said in my first book, this is like Ford selling off the Lincoln Division of GM and not telling anyone for 7 months.  We can appreciate their concerns, but reciprocity seems to not be in the Chinese vocabulary.  [see Are Chinese Businesses like Ours?]. The Chinese were concerned about influence enough to require the sale, even though they knew it would be trouble in financial markets - which it was.  The action indicates that the Chinese see the potential to influence through financials, the same reason that had them stealing information from banks, credit unions, insurance companies and credit institutions.

Governments need to look more closely at what China is doing with its IT industries because those places are being used for spying.  As the studies at the University of Toronto show, browsers from several of the large Chinese vendors are being used to collect information that Google would never think to collect - hard drive serial number, nearby WiFi connections, the unique identifiers for cell phones that they operate on - all things that are not needed by a browser to do much of anything, but help target a specific individual.  Getting into the personal finances of an individual is powerful tool that can be exploited by people who might find that helpful to persuasion.  After all, China does it with our national debt, so there is no reason to believe their won't use it to their advantage in these other transactions.  China wants us to believe that their companies are "just like yours" which is an absolute farce.  You can't blame Alibaba and WeChat for what the government has forced them into, but you can't ignore it either.     Books by Dennis Poindexter