Back on June 7, when Sequoia Capital announced that it was splitting off its China business, I wrote, "This is an intriguing approach that could set a pattern for other companies. Imagine if Apple, or Tesla, or General Motors, or JPMorgan Chase, split their China businesses off separately, allowing people who want to invest in China to do that, and allowing people who don't want to invest in China a chance to sell, or pass. Let the market put a price on the risk of operating in a Communist Party-run place without strong property rights or rule of law."
Now the Financial Times reports that drugmaker AstraZeneca is looking at plans to separate out its China business, and that it "is among a growing number of multinational companies now considering that option." And the Information reports, "The University of Chicago, the Robert Wood Johnson Foundation and other major U.S. endowments and foundations have recently indicated to Chinese fund managers and others that they are halting investments in the country, according to people with direct knowledge of the communications. U.S. public pension funds also have largely pulled back from China, according to Chinese VC firms and people who help them raise capital."
A lot depends on whether the newly created China spinoffs are genuinely independent or not. One can imagine a lot of situations where the spun-off entity winds up getting basically seized by the Chinese Communist Party, or where it exists to provide U.S.-based corporate leaders with the illusion of distance—plausible deniability—necessary to provide an excuse for failing to live up to Western standards of labor rights. Whether one calls it decoupling or de-risking, it is a trend to watch for among American companies active in China.