What is your mission? Are you looking to gather information or to try and convince some of these Wall Street executives to change their ways when it comes to China? It's both. Today is 22 years since 9/11. We're going to start the day by participating in the ceremony at Ground Zero. In my mind it’s a good way to frame it. Nine-eleven was this exogenous shock to the system that had massive financial, economic and human repercussions. Similarly, an invasion of Taiwan could be an exogenous shock that Wall Street tends to discount. We want to have a candid conversation with experts in the financial community about the systemic risk that comes with American capital flowing into China. You’d have closure of global shipping lanes. You’d have astronomical shipping insurance premiums. You’d have supply chain disruptions. General geopolitical chaos. Are our banks and asset managers going to protect American investors or are they just betting on another bailout? Who are you meeting with? We have representatives from big banks whose names you would recognize, as well as some of the biggest asset managers, as well as people from the venture capital and private equity community. Do you see much resistance on Wall Street when it comes to your message? Yes, a lot of resistance. It’s fair to say the bankers and the asset managers find my view of the world to be too hawkish. A lot of people here still cling to the theory that financial interdependence is a stabilizing mechanism and that ultimately China will be a more responsible stakeholder the more enmeshed they are in the U.S. capital markets and the more enmeshed we are in Chinese manufacturing. [Dove-ish Wall Street types] would be fine with a more aggressive set of guard rails on things like outbound capital flows but … they want predictability. So to what extent are you working with House Financial Services Chair Patrick McHenry, who has jurisdiction to write new laws but is less willing to intervene in the markets? Even though he might have a different view of how best to legislate the question of outbound capital flows, we’ve had a productive working relationship. We’re hoping to influence the product that eventually comes out of Financial Services. What we’re talking about now is, what mechanism do you use? I’d prefer a sector-based approach as opposed to sanctioning individual Chinese companies. That’s the core of the discussion right now. So we’ll see where we land. Happy Tuesday — Please send tips: Zach Warmbrodt, Sam Sutton.
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