Wells Fargo and BlackRock Severely Limit Employee Work in China
BlackRock and Wells Fargo have both made major changes to how they do business in China with recent travel restrictions making things worse.
Quick overview
- BlackRock and Wells Fargo are implementing strict limitations on employee operations in China due to increased restrictions from the Chinese government.
- BlackRock has banned its employees in China from using laptops and other devices, opting for temporary phones to maintain communication.
- Wells Fargo is slowing down employee travel to China following the detention of one of its senior bankers.
- The U.S. government is advising citizens to exercise caution when traveling to China due to potential restrictions and scrutiny.
Both BlackRock (BLK) and Wells Fargo (WFC) are changing how they operate in China, with strict limitations placed on their employees there after China restricts what they can do.
In a case of what looks like big companies responding to China firing the first shots, Wells Fargo is slowing down employee travel to China and BlackRock has banned its employees in China from using laptops. This is the latest development in an ongoing silent war between China and companies that operate within their borders but are not local businesses.
In 2021, BlackRock started to change how it communicated and used data after China increased their data regulations. Companies like BlackRock have been finding alternatives to international calls and conferences, instead opting for local data centers, compartmentalized operations, and simply paying sky-high fees to stay in business in the lucrative Chinese market. These companies do not want to lose their Chinese customers, but they also do not want to face exorbitant fines and hindrances to their international movement.
BlackRock Responds
BlackRock made a move recently to completely restrict its employees in China from using laptops, iPads, iPhones, and VPNs within the country. They sent out a memo that took effect last week effectively changing up their communication methods for China. Now, their travelling employees use temporary phones that are loaned out to them. If they are travelling to China, they cannot access BlackRock systems.
This has greatly hindered their effectiveness in the country, and it could affect their ability to retain a presence there. Since China has increased data regulation, even limiting how data can be moved from one country to another through basic communication methods, many companies have made major changes to accommodate the new legislation. These restrictions make very simple business transactions much more complicated and make companies like BlackRock feel like their data is not secure.
Wells Fargo Limited Travel
Wells Fargo is taking action in recent days as well, requiring its employees to hold off from visiting China for now. This change has occurred after one of their senior bankers was held in the country. This happened at the same time that an employee from the U.S. Commerce Department was prohibited from leaving the country.
What companies have taken away from these incidents is that moving across China’s borders freely is not something that they can always expect. Since April, the Commerce Department employee has been detained in China despite ongoing efforts from the United States government to have him returned.
At this time, the United States government is urging its citizens to be careful about travel to China, as they may face unexpected restrictions and delays in leaving. Because China has no law permitting dual citizenship, U.S. citizens living abroad in China can face harsh scrutiny.
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