Risk Factors: Chinese companies are exploiting American capital markets

Excerpt

The Chinese fast fashion giant Shein has filed to go public in the U.S., with Goldman Sachs, JP Morgan Chase and Morgan Stanley as lead underwriters. The IPO (initial public offering) is projected to raise billions of dollars. It is also colored by controversy.

Shein has faced pushback — and litigation — for everything from labor abuses to trademark infringement. It has been accused of everything from unsustainable production practices to tax evasion.

But even those controversies pale in comparison to a bigger question, and controversy, about the Shein IPO. It underscores a dangerous rift between the U.S. policy narrative in Washington, D.C., and the U.S. market reality as reflected on Wall Street and in Silicon Valley. That rift reveals the ineffectiveness of (claimed) U.S. efforts to defend against and compete with the Chinese Communist Party (CCP) and its global ambitions.

Emily de La Bruyere and Nathan Picarsic are senior fellows at the Foundation for Defense of Democracies and co-founders of Horizon Advisory