Strategy Risks

Today, Strategy Risks is releasing Shared Labs, Shared Harm -- a report on how MIT, Stanford, Harvard, Oxford, and 20+ other Western universities used U.S. and U.K. government funding to become embedded in China's AI surveillance apparatus.

Excited to announce that we found a key correlation between China exposure and stock movement following Trump's Friday tariff threat. Why? China exposure isn't just revenue and supply chains, but also political exposure. Email [email protected] for a note on the subject.

Ford, which ranks #7 on Strategy Risks Index of US companies' China exposure, announces plans to work more with controversial Chinese battery maker CATL.

The trade truce announced on Monday saw companies with greater China exposure nearly DOUBLE the gains of their less-exposed peers, and notably higher than the S&P 500 as a whole that climbed 3.3%. According to @StrategyRisks data, the top half of the SR 250 Index - which tracks China exposure among America’s 250 largest companies - jumped an average of 4.0%, while the bottom half added just 2.2%. Semiconductor stocks performed especially well: they jumped 6% on average due to their heavy dependence on exports to China and vulnerability to Chinese tariffs. In the SR 250’s Business Fundamentals metric, which evaluates companies’ operational and sales footprint in China, chipmakers score an average of 17.9 out of 25. The three highest scorers - KLA Corporation, Applied Materials, and Lam Research - each surged by more than 7.9% on the day. China contributes around 40% of global revenue for all three companies, underscoring the importance this temporary tariff respite brings to the chips industry. If you'd like more information, or for a free trial of the data, please contact us at: [email protected]

Manufacturing stocks’ were buoyed by the likelihood of more protectionism. See Caterpillar (NYSE:CAT) & Parker-Hannifin (PH) at >8% growth. Although many companies that surged rank in the Top 10 of SR 250 for TOTAL China exposure, supply chain risk is not the driving factor

The negative trend for these consumer-oriented industries contrasted heavily with the general market on Wednesday, which largely welcomed Trump’s victory. Although the auto industry is also heavily dependent on China, its stocks spiked, driven by a 14.75% surge in Tesla.

SR 250 divides exposure into five categories, including Supply Chain, where a higher score indicates more dependency on market imports from China. Nike, Colgate, General Mills & Mondelez all rank in the top 30 in China Supply Chain Exposure for 2023.

Strategy Risks found a correlation between higher China Supply Chain Exposure Scores and poorer market performance the day after the election. The Strategy Risks Index 250 (SR 250) ranks top American companies on their China exposure.

SR's data shows that industries with heavy supply chain risks in China reacted most negatively to Trump's election victory. Food, apparel and consumer products are most exposed to supply chain disruptions, which will be affected by Trump’s promised 60% tariffs on Chinese imports

We are live! The SR 250 ranks the top US companies on their China exposure. We'll be tweeting more soon on who the top ten and bottom companies are...watch this space. strategyrisks.com/data-produ…

China is demanding acts of loyalty from its expats living and working in the US, especially students or young professionals who joined the CCP. By some estimates, at least 10,000 members of the party are studying or working in the US.

Chinese Premier Li Qiang will visit New Zealand later this week. New Zealand is a candidate to join the AUKUS alliance, a move that Beijing opposes. NZ has taken a softer approach on PRC issues compared to other AUKUS members. Will the state visit influence NZ's decision?

A look into Chinese social media narratives following the death of Iranian President Raisi: the official narrative on Weibo is largely neutral and filled with condolences to Iran. But conspiracies regarding Israeli & American involvement in the death of Raisi are flourishing.

Microsoft is offering its employees in China to relocate overseas, reports the @WSJ The staffers in question are mostly engineers of Chinese nationality working on machine learning and cloud computing. Washington has been trying to limit Beijing's access to advanced chips used in AI applications on grounds that they can be used to strengthen the country's military, sparking tensions that have put pressure on U.S. companies operating in China.