“It is an amusing irony,” Matthew Sigel Portfolio Strategist at CLSA begins in his 18 September Hello Investors research note ” that Steve Bannon’s first ever Hillary Clinton-like speech to investors was an emphatic defense of trade tariffs and economic nationalism , at a conference sponsored by a global stockbroker owned by a Chinese SOE, at a luxury hotel in free-trading Hong Kong.”
Sigel is referring to Bannon's public speaking engagement at a conference hosted by CLSA, a unit of Citic Securities, China’s largest state-owned brokerage. The focus of the speech was “American economic nationalism and the populist revolt and Asia,” a strange topic considering the environment and audience.
Bannon on Economic Nationalism in an interesting venue
Bannon's choice of topic, and decision to speak at the event, has raised eyebrows from the main-stream media because of his previously aired stance on China and globalization. At the beginning of this month, Bannon told the New York Times that China's growth is "not sustainable,” and “the reordering of the economic relationship is the central issue that has to be addressed, and only the US can address it.” Then, just days before his CLSA speech, Bannon said in an interview on CBS, “I want China to stop appropriating our technology. China is, through forced technology transfer and through stealing our technology, but really forced technology transfer is cutting out the beating heart of American innovation" (an assessment agreed with by many top US officials, especially in defence). He went on to say, “we’re not at economic war with China, China is at economic war with us.”
In Hong Kong, Bannon declared that the Trump administration’s investigation of US/China technology transfers under section 301 of a 1974 trade law is the first & necessary step in addressing failed multilateral trade agreements, which American's reportedly no longer support to the same degree as they have done in the past.
On the other hand, as the middle class has declined over the past few decades, many Americans believe that trade deals tend to favor big corporations and cheap labor from abroad and illegal aliens who help suppress wages - a factor behind not just Trump's win but Bernie Sander's massive popularity. Furthermore, it is undeniable that regardless of the cause of that decline, China has been a big winner. And whether correlation or causation, China has grown rapidly alongside the fall of US manufacturing jobs.
In an equally miscalculated statement (according to some), Bannon also claimed in his speech that falling corporate profit margins would be an unavoidable consequence of his Economic Nationalism warfare on the elite, which reported caused " audible shudders from the globalist crowd" in attendance.
The venue was strange but perhaps CLSA part of that "global elite" who deride anyone who criticizes them? And maybe the irony is lost on them, especially since China has a lot to lose if America puts tariffs on Chinese goods.Although that would hit Chinese manufactures most, the financial sector likely will not be spared.
So who is right? That is for our readers to decide.