More indications of the growing financial exit to avoid the predictable response from totalitarian moves by Beijing.  [Backstory – Backstory] Now we see reports growing of mass financial moves out of Hong Kong, as billionaires see the looming shadow of Red Dragon closing in…

HONG KONG (Reuters) – Some Hong Kong tycoons have started moving personal wealth offshore as concern deepens over a local government plan to allow extraditions of suspects to face trial in China for the first time, according to financial advisers, bankers and lawyers familiar with such transactions.
One tycoon, who considers himself potentially politically exposed, has started shifting more than $100 million from a local Citibank account to a Citibank account in Singapore, according to an adviser involved in the transactions.
“It’s started. We’re hearing others are doing it, too, but no-one is going to go on parade that they are leaving,” the adviser said. “The fear is that the bar is coming right down on Beijing’s ability to get your assets in Hong Kong. Singapore is the favoured destination.”

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It’s important to remember President Obama’s ideological ally, former DOJ Civil Rights Division head Tom Perez, is the current Chairman of the DNC.  There are still two generally adverse camps within the DNC Club, though the boundary is much softer.
The professionals (former Clinton wing) and the activists (former Obama wing).  Tom Perez hails from the ideological activist wing.  The Democrat debate will take place in Miami and the group has been broken up into two groups over two nights.

Despite the nonsense that might be spun by NBC, the selection was not random draw (they never are) by the club. The DNC selected the candidates for each night and coordinated with NBC.  Interestingly, Elizabeth Warren is the biggest winner and Bernie Sanders is the biggest loser.  That’s a *tell*.  The DNC is shaping the perspectives of the college crowd.
By positioning Elizabeth Warren on the first night (highest rating night); and positioning her with little intellectual or policy challenge; it appears the Perez DNC activist wing wants Warren over Sanders. It’s also obvious Warren can critique Sanders without an rebuttal (smart move).  Additionally Beto will look like the goofball he is.  This helps assemble the college crowd to Warren (again, subtle but smart move).
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Against the intense leverage being applied by President Trump, last week Beijing doubled-down and threatened punishment against any company that would leave China and begin manufacturing elsewhere.
The totalitarian response was predictable and expected.  However, also predictable was the corporate response to the threats.
As we shared:  “China is counting on prior western investment being so significant that a corporation will be reluctant to withdraw. However, in this outlook Beijing seriously underestimates the free market because communist controlled China doesn’t understand the action of a inherently free market.
The first loss is the best loss. If walking away from an investment provides more financial security and stability than attempting to retain a grip on a tenuous position – corporations will walk away.” (more)
Now today – “Nintendo Moves Some Switch Production Out of China”:

TOKYO— Nintendo Co. is shifting some production of its Switch videogame console to Southeast Asia from China to limit the impact of possible U.S. tariffs on Chinese-made electronics, said people who work on Nintendo’s supply chain.
It is another example of manufacturers adapting to the tariff threat. Taiwan’s Foxconn Technology Group said Tuesday that it was ready to move assembly of Apple Inc.’s iPhones out of China if necessary, and Japan’s Sharp Corp. , which is controlled by Foxconn, said last week that it planned to move production of personal computers to Taiwan or Vietnam.

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On Tuesday afternoon President Trump was asked a question by media about Kim Jong Un.  President Trump responded to the question, and simultaneously delivered an openly coded message to Chinese Chairman Xi Jinping that few would understand:

[Transcript] Q (Inaudible) about your meeting with Kim Jong Un while you’re in South Korea? Are there discussions underway?
THE PRESIDENT: So, I see that. And I just received a beautiful letter from Kim Jong Un, and I think the relationship is very well. But I appreciated the letter. I saw the information about the CIA, with respect to his brother, or half-brother. And I would tell him that would not happen under my auspices, that’s for sure. I wouldn’t let that happen under my auspices.
But I just received a beautiful letter from Kim Jong Un. I can’t show you the letter, obviously, but it was a very personal, very warm, very nice letter. I appreciate it.

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There’s always a larger geopolitical dynamic when you assess the economic alliances that President Trump puts together…. Always and underlying plan…  Sometimes it just takes time to surface.
As we have noted, even going back to 2017, Japanese Prime Minister Shinzo Abe always appeared to be the fulcrum for President Trump’s Indo-Pacific strategy.  

Remember the trip to Japan as honored guests of Emperor Naruhito and Empress Masako at the Imperial Palace?  Remember last month’s (May 25th) unprecedented reception with the titans of Japanese business?  Remember the private reception set up by a very nervous U.S. Ambassador William F. Hagerty?  A reception with the most influential business CEO’s in Japan and Southeast Asia? 
Well…

TOKYO (Reuters) – Japan’s Tokyo Electron, the world’s No.3 supplier of semiconductor manufacturing equipment, will not supply to Chinese clients blacklisted by Washington, a senior company executive told Reuters.
The decision shows how Washington’s effort to bar sales of technology to Chinese firms, including Huawei Technologies, is ensnaring non-American firms that are not obliged to follow U.S. law.

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Former White House China trade negotiator Clete Willems makes a rare appearance to discuss President Trump’s ongoing trade position with China; and the lessons they are learning from Trump’s severity with Mexico.
Fox News talking-hair Leland Vitter, a prime example of the axiom: “a little knowledge is dangerous”, tries his best to promote the preferred Murdoch points; however, Vitter finds himself struggling against the weight of the examples highlighted by Mr. Willems. Quite funny actually:

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Worth noting: President Trump spoke with Mexican President Andres Manuel Lopez-Obrador (AMLO) yesterday (See Tweets Below).
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Interesting, albeit not surprising, report from the New York Times after they are debriefed by a group of U.S. tech industry executives about a compliance meeting in China.
The Beijing regime of Chairman Xi Jinping summoned leaders from the top of U.S. tech industry companies and informed them of consequences for complying with U.S. laws that relate to black-listed Chinese industry; ie. Hauwei.  It will be interesting to see how this dynamic plays out.
Beijing is counting on the far-left anti-American ideology within Silicon Valley to create a communist economic alliance on U.S. soil that will work against the interests of the American people.

SAN FRANCISCO — The Chinese government this past week summoned major tech companies including Microsoft and Dell from the United States and Samsung of South Korea, to warn that they could face dire consequences if they cooperate with the Trump administration’s ban on sales of key American technology to Chinese companies, according to people familiar with the meetings.

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When President Trump began confronting China on trade practices, there was always a likely totalitarian Chinese response. The inevitable response when confronting the duplicitous dragon is always an attack; it’s the only way Beijing knows how to respond.

Last week Beijing threatened to take action against any corporation who would be perceived as working against the interests of the state.  This week communist Beijing begins doing exactly that:

(SCMP) China’s antitrust regulator slapped a US$23.6 million fine on Ford Motor Company’s Chinese venture for restricting sales prices in its hometown, taking the second such action against US carmakers in three years as trade tensions deteriorated between the world’s two largest economies.

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All your interests are belong to us…. There was previous discussion of how Beijing would respond if/when their economic interests were challenged. In essence, the prediction was that China would drop the panda mask and revert back to their oppressive totalitarian tendencies.

It is an interesting dynamic because the more the communist state moves to punish and control western business interests, the less likely any western investment flows into China. It’s a simple question: Why would anyone want to engage a business relationship inside a totalitarian system that could move at any moment to control your business?

(South China Post) China will publish a list of “unreliable” foreign entities deemed to have damaged the interests of Chinese firms – a move set to ratchet up tensions in its escalating conflict with Washington, after the US government blacklisted Chinese telecoms giant Huawei.
The Ministry of Commerce said on Friday that it would blacklist foreign businesses or individuals that violated market rules and contractual obligations, or took “discriminatory measures” to hurt Chinese business rights and interests, as well as national security and interests.

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Vice-President Mike Pence traveled to Canada today as an emissary of the Trump administration to support Canadian passage of the USMCA trade agreement.
According to Reuters media reports the vice-president was focused on the importance of a strong North American economic alliance, and how a united tri-lateral agreement can form a geopolitical hedge against influence from communist China and socialist ideologies in Cuba and Venezuela. Justin from Canada expressed his perspectives over diminished women’s rights, U.S. abortion laws, the important contributions of a transgender workforce, climate change and the NBA championship playoffs…. Yes, really:

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Meanwhile in Mexico: “The Senate, controlled by Lopez Obrador’s National Regeneration Movement (MORENA) and its allies, should approve the United States-Mexico-Canada Agreement (USMCA) once it has passed through congressional committee, the president said.” (link)
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