On Saturday, Grady, Eamon, and I explained how last week’s surprise crackdown on ride-hailing giant Didi Chuxing reflects Chinese leaders’ heightened (and perhaps irrational) fears that Chinese tech firms are surrendering domestic user data to U.S. financial regulators, thereby endangering national security.

That same day, China’s cybersecurity watchdog, the Cyberspace Administration of China, proposed new rules that would require any company holding the data of more than a million users to apply for the agency’s approval when seeking to list on overseas exchanges. That data threshold is so low that it would apply to nearly every Chinese company that does business over the Internet.

Bloomberg reported that regulators also may require companies that are already listed on foreign exchanges—for example, Alibaba Group Holdings and Tencent Holdings—to seek approval for any additional overseas share offerings.

On Monday, the Wall Street Journal reported that ByteDance, the Chinese owner of short-video platform TikTok, pulled back from plans to sell shares overseas this year. The Journal says ByteDance’s founder, Zhang Yiming, called off the IPO back in March after meetings with cybersecurity and securities regulators in which authorities expressed concerns about the security of the company’s data.

Zhang’s decision to lie low is sure to dismay his U.S. bankers; ByteDance, last valued at $180 billion, is said to be the world’s most valuable startup.

Here in Hong Kong, the financial industry is practically salivating at the prospect that Wall Street’s loss will prove this city’s gain. The 250 Chinese companies currently trading on U.S. exchanges have a combined market capitalization of nearly $2 trillion. If even a fraction of those firms were to de-list and come back home, Hong Kong would reap an enormous windfall. (Shares of Hong Kong Exchanges and Clearing, the company that operates the Hong Kong bourse, have gained 11% this month.)

Are Hong Kong’s capital markets deep enough to absorb such an influx? Will Beijing pressure Hong Kong to re-write its listing rules to accommodate them? And, as Hong Kong-based investor Anthony Lawrence wonders in this essay for SUPChina.com, will the U.S. sit idly by and “accept that companies in which American teachers’ pension funds are invested can skip across the pond to Hong Kong rather than having to cough up their financial audits” to U.S. regulators?

Good questions all—unless you believe, as many investors seem to, that Beijing and Washington won’t let things spin that far out of control. Last week, I suggested that the notion of a full Chinese retreat from Wall Street was “hard to imagine” because it would be so disruptive for both the U.S. and China.

Historian Niall Ferguson begs to differ.

In a provocative essay published by Bloomberg this weekend, Ferguson argues financial “decoupling” of the two superpowers requires no imagination because it’s already happening. He sees the Didi crackdown, along with mounting pressure on both sides of the Pacific to push Chinese companies off U.S. exchanges, as fresh evidence that the U.S. and China are in the throes of “Cold War II.”

Western investors who fail to recognize that, Ferguson warns, will be among the confrontation’s “big losers.”

In The Hill, meanwhile, veteran policy analyst and Harvard Kennedy School senior fellow William Overholt offers a withering critique of the Biden administration’s ability to manage that challenge. The paradox of the Biden foreign policy team, he argues, is that it lacks China expertise—even as it proclaims dealing with China to be its top priority.

Overholt, a Democrat, faults the Biden team for needlessly provoking China on a host of issues, particularly Taiwan. “The more you see China as a dangerous adversary,” he argues, “the more important it is to actually understand China. It is insufficient for officials to be well-connected, experienced on Middle East issues, and dislike China.”

More Eastworld news below.

Clay Chandler
– clay.chandler@fortune.com

This edition of Eastworld was curated and produced by Eamon Barrett. Reach him at eamon.barrett@fortune.com.

EASTWORLD NEWS

GBA data dam

Guangdong province is drafting rules for industrial data sharing across the Greater Bay Area—an integrated economic hub that covers Guangdong, Hong Kong, and Macau. The new rules are coming together as Beijing tightens rules on data-heavy companies. China technically considers Hong Kong and Macau as “overseas” territories and is wary of sensitive data leaking outside of mainland China. The hub is intended to vet and review data that crosses borders and may concentrate more data in the mainland instead of Hong Kong.  Deal Street Asia

Defend the island

Japan mentioned stability in Taiwan in its annual defense report for the first time ever, stating that “the situation around Taiwan is important, not only for the security of our country, but for the stability of the international community.” The U.S. has been pressing Japan and other regional allies to play a more active role in rebuffing Beijing’s threats against Taiwan. The self-governing island is the world’s most important manufacturer of semiconductors. Bloomberg

Resigning in Hong Kong

Around 230 pro-democracy district councilors have announced plans to resign in Hong Kong rather than comply with a new law that forces them to swear allegiance to the ruling government. The councilors are the last pro-democracy holdout within the Hong Kong government. The pro-democracy camp seized 80% of district council seats in a landslide victory at the end of 2019—the year of anti-government protests—rebuffing Chief Executive Carrie Lam’s assertion that a “silent majority” continued to support her government. National Security police have since arrested dozens of pro-democracy politicians, many of whom resigned in protest last year. Nikkei

A coup, then a COVID crisis

Cases of COVID-19 are surging in Myanmar. According to the junta, which seized control in a coup on Feb. 1, the country recorded over 3,400 new cases on Sunday, although the actual figure is likely higher. Many of the nation’s health care workers are on strike to protest the coup. The military takeover also upended the government’s vaccine drive. Covax, the WHO-run vaccine sharing scheme, cancelled a shipment of over 5 million vaccines after the coup. The junta says it is securing 5 million vaccine doses from China, plus 2 million from Russia. With case numbers rising rapidly, functioning hospitals are running out of beds and medical oxygen is in short supply. The Irrawaddy

Taiwan tech buys BioNTech

China’s Fosun has agreed to sell 10 million COVID-19 vaccines produced by Germany’s BioNTech to two Taiwanese tech firms, potentially breaking a months-long debacle that has prevented Taiwan from accessing the BioNTech vaccine. Taiwan chipmaker TSMC and Apple supplier Foxconn will purchase the vaccines from Fosun, which owns the distribution rights for BioNTech in Hong Kong, Taiwan, Macau and mainland China. The two tech leaders will then donate the vaccines to the Taiwan government through a third-party intermediary. It’s a convoluted workaround to a political issue. Fortune

MARKETS AND MOVERS

Sunshine — Two of China’s top solar panel makers, Jinko Solar and CSI Solar, have applied for secondary listings on Shanghai’s Star Market. The two companies are units carved out of a singular parent company that is currently listed in the U.S.

BTS, Bieber, Bang – Shares in Hybe, the agency behind K-pop phenom BTS, have risen 130% since the company went public last October, earning Hybe founder Bang Si-hyuk a net worth of around $3.2 billion. In April, Hybe, formerly known as Big Hit Entertainment, paid $1.05 billion to acquire Ithaca Holdings, the agency behind Justin Bieber and Ariana Grande.

Suning — Zhang Jindong has stepped down as chairman of retailer Suning, one week after a government-led consortium gave the indebted company a $1.36 billion bailout. The consortium took a 16.96% equity stake in Suning in exchange for the funds.

Huawei — Huawei and Verizon settled two patent lawsuits, brought by Huawei, midway through federal court trial that started in Texas last week. Neither side has announced details of the settlement agreement. Meanwhile, a Canadian court ruled that Huawei CFO Meng Wanzhou could not submit additional documents—released by HSBC after Huawei sued for disclosure in Hong Kong—as evidence in her ongoing extradition hearing. The CFO was arrested in Vancouver in December 2018.

Zomato — India’s food delivery app Zomato will go public in India on Wednesday. The homegrown app is seeking to raise $1.3 billion, targeting a valuation of roughly $8 billion.

FINAL FIGURE

11,000

More than 11,000 oxygen concentrators will be sent from Singapore to Indonesia, as the world’s fourth most populous country battles a resurgence of COVID-19. Concentrators extract and purify oxygen from ambient air and are different from ventilators, which force air into a patient’s lungs to assist with breathing. Indonesia reported 40,427 new cases on Monday as daily numbers have skyrocketed from around 5,000 in the middle of May.