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In the age of Donald Trump, when Americans fancy themselves victims, favor building giant walls and revel in insults hurled at key trading partners, China’s bid for Chicago Stock Exchange is a non-starter.

Purists will take exception to my use of “China.” Chongqing Casin Enterprise Group, they’ll argue, isn’t the Communist Party. And they’ll be wrong, at least to lawmakers facing elections amid rising American isolationism. Trump captured the zeitgeist, declaring, with all the incredulity he could muster, “take a look at what happened just this week -- China bought the Chicago Stock Exchange! China!! A Chinese company!!!” It was part of a rant that “they’re taking our wealth; we’re going to bring that money back.”

In 2013, Congress blocked a Chinese company’s bid for hog producer Smithfield Foods. If Capitol Hill links pigs with national security, it certainly won’t let mainlanders buy a stock bourse in the No. 3 U.S. city. Yet this is also a moment for China Inc. to look in the mirror and consider its own culpability as Washington frets its designs on America.

In a letter to the U.S. Committee on Foreign Investment, 46 Congress members warned that Chongqing Casin bears the “traditional opaque qualities” of a mainland entity with close government ties. Party bigwigs in Beijing are free to object to that characterization; so is Chongqing Casin Chairman Shengju Lu. There’s only one way to alter perceptions virtually all Chinese companies are in the government’s pocket: create a genuine private sector.

President Xi Jinping’s pledges to do just that to create new jobs and broaden the benefits of growth have amounted to little. In fact, the chaos of the last 12 months prompted Xi to increase the government’s dominance. He effectively nationalized stocks, tossed more credit at the state-owned enterprises it claimed to be reining in and allowed local leaders to build new ghost cities to achieve 6.5% growth.

Goldman Sachs is telling investors not to panic as mainland growth slows, and it may be right. The worry, though, is that frantic efforts to maintain today’s growth will lead to a bigger and more spectacular crash. On Tuesday, Standard & Poor’s warned a surge in borrowing could imperil Beijing’s credit rating, just days after bad loans rose to the highest in a decade. If Xi’s reform drive is over, including efforts to curb state-connected giants impeding private-sector development, then Washington skepticism will grow.

The brand of overseas expansion seen in Anbang Insurance Group’s Waldorf Astoria purchase and Wanda Group scooping up Hollywood’s Legendary Entertainment is colliding with Trumpism. Is prejudice at play when U.S. lawmakers consider Chinese purchases? Yes. Stereotypes? Sure. Fear? Absolutely. Yet U.S. companies aren’t competing with Chinese peers, but the entire Chinese government. Beijing does itself no favors by deepening that sense of suspicion already heightened by government-sponsored computer hacking.

It’s rather awkward that John Kerin, CEO of Chicago Stock Exchange, can’t figure who really owns Chongqing Casin or how much of a hand Beijing plays. U.S. lawmakers point out it was set up the government in the late 1990s to manage certain state assets. Chairman Lu is said to be close the government of Chongqing, the former stomping ground of imprisoned powerbroker Bo Xilai. While the Chicago exchange is small beer –- handling only about 0.5% of U.S. equity trading -– it would give an opaquely run Chinese company a firm foothold in a $21 trillion market.

Though tiny, the 134-year-old bourse can hold great sway in the world’s biggest equity arena, where trades are routed to the exchange offering the best price on a stock at any given moment. So, price action there could influence the value of any listed company. Wall Street’s central data feeds link Chicago to the New York Stock Exchange and the Nasdaq. As the Chicago Tribune put it in an editorial, the “exchange, after all, is essentially a high-tech company embedded in the American capital markets.”

Modern security fears often have less to do with military forces than economics, markets and cyber espionage. It’s not the Evil Empire that preoccupies the halls of power around the globe, but Moscow’s credit rating. The same is true of China, which is growing at the slowest pace in 25 years. In both cases, creating big, vibrant private sectors the world trusts requires bold political change, too.

Anders Aslund warns of a “submerging-market threat,” whereby opaque developing economies – China and Russia especially -- that once wowed the world veer into secular stagnation. “These two large emerging countries,” Asland of the Washington-based Atlantic Council wrote in a Project Syndicate op-ed, “are still led by authoritarian governments, headed by ruling elites who - given how much wealth they have amassed - may be the most corrupt in history.”

Not a great backstory as China Inc. looks for U.S. opportunities. The Chinese model, after all, favors gaining technology transfers and expertise through overseas purchases. That’s particularly true of a nation hoping to morph into a global services power, one known more for Alibaba and innovation than smokestacks. That model will become less viable as investors and lawmakers and presidential wannabes like Trump clamor for clear and verifiable lines between public and private entities.

Winning Washington’s trust means shifting the economic power and energy to small-to-midsize companies devoid of political connections and questionable priorities. At the moment, such ventures are being starved for credit and market access as Beijing tosses ever more sweeteners at state-run behemoths -– and spooks lawmakers 5,500 miles away to its own detriment.

Comments? E-mail us at william.pesek@barrons.com

Comments? E-mail us at asia.editors@barrons.com