Global investment banking, securities and investment management firm, Goldman-Sachs got slammed by a negative online debate that was fueled by the growing nationalist sentiment in China.
Speculations against foreign firms have dampened China’s efforts to woo foreign business in an attempt to offset the ill effects of US-China trade war.
Netizens are blaming Goldman for severe trading losses suffered by China’s state-owned oil enterprise Sinopec.
Sinopec’s share price in Hong Kong and Shanghai plunged after it admitted to incurring “some losses during certain crude oil transactions due to the oil price drop”, it said in a statement released to the Hong Kong stock exchange on December 27.
Brock Silvers, managing director of Kaiyuan Capital, said one challenge that western financial firms face when they advise Chinese clients on increasingly sophisticated transactions, is that corporate China often operates in legal grey zones:
“If Sinopec’s suspended executives broke existing law, they and their facilitators deserve sanction. But as China continues integrating its financial sector into global markets, foreign firms also need confidence that legal grey zones are unintentional, and that good faith efforts to legally navigate them won’t be retroactively condemned.”
Online complaints indicate the growing mistrust of the population toward foreign financial operations in China.
Luxury designer Dolce & Gabbana, Canadian down coat maker Canada Goose and South Korean retailer chain Lotte, have also been targeted by the Chinese online community.
Dolce & Gabbana suffered a backlash over racist issues, while Canada Goose had to postpone the opening of Beijing branch after the arrest of Huawei chief financial officer Meng Wanzhou in Canada.
Meanwhile, Lotte pulled out of China after a public boycott of its outlets was promoted online.
The Chinese government has taken steps to control online debates as well as official media. However, the timing and extent of these populist backlashes against foreign firms is completely unpredictable. Thus, making it more challenging for companies to take defensive counter- measures.