Steve Bannon's proposal to ban Chinese firms from American financial markets - that is, to stop them from IPOing on the NYSE or Nasdaq, or issuing debt - has little chance of ever becoming official government policy, mostly because Wall Street would never let that happen.
But thanks to the increasingly strained relationship between Washington and Beijing, not to mention CFIUS's decision to force Beijing Kunlun Tech Co. to sell Grindr due to 'national security concerns', it's likely that Chinese companies will be steering clear from American markets for the time being. For Bannon, that might register as a small victory.
Madhu Namburi (left)
According to a senior JP Morgan tech banker, the chances of a Chinese firm doing a big deal in the US in the near future are virtually zero. Given the intense political risk, a Chinese company wouldn't even risk buying "a trash can" in the US, said Madhu Namburi, head of technology investment banking at JP Morgan, during the Collision technology conference in Toronto.
"If you’re a Chinese company, there’s no way in hell you’re buying anything in the U.S., not even the trash can, for the foreseeable future."
Twitter wits couldn't help but point out the fact that the 'trash can' in question is probably manufactured in China.
The trash can is produced in China - dear JP pic.twitter.com/TjjYRiJ0ox— SOX CAPITAL (@ZMSOXCAPITAL) May 23, 2019
Meanwhile, as we have pointed out in the past, Beijing has literally stopped buying trash and recyclables from the US, with senior Communist Party officials boasting that China will no longer be America's 'dumping ground."
With disposal options dwindling, China's trash ban is forcing a "moment of reckoning" in some American cities. And to be sure, at least as far as major M&A and real-estate transactions are concerned, Beijing's crackdown on capital outflows that began back in 2017 had already caused deal flow to dry up.