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China's `Financial Statecraft' Takes Shape in Risk for Investors

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Photographer: Qilai Shen/EPA

Tapping Chinese demand can be great for business, but it also leaves companies and economies vulnerable if the single-party state decides it doesn’t like a country’s policies -- a dynamic that global investors may not yet fully appreciate.

"Financial statecraft is an integral part of China’s foreign policy," Marc Chandler, a Brown Brothers Harriman strategist, put it. Case in point: recent news has tallied the cost for South Korea, which has run afoul of Chinese interests by pursuing an American missile-defense shield.