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Posted by uncensored > 2022-01-25 00:26 | Report Abuse

Transactions involving state firms buying into private ones exceeded $20 billion last year, more than double the 2012 level, in industries including financial services, pharmaceuticals and technology, disclosures by publicly traded companies show.

“State-owned enterprises must play a leading role and important influence on the healthy development of private enterprises,” says a new central-government action plan for the next three years, which calls for more mergers between state and private firms.

Beijing OriginWater Technology Co. , a provider of sewage-treatment services that competes with the likes of General Electric Co. , was one of the target firms. It was started in 2001 by Wen Jianping, an engineer who had studied in Australia. He was eager to help clean up China’s polluted water supply and take advantage of the country’s increasingly open business environment.

As demand for water purification grew, Mr. Wen’s business thrived. An initial public offering in 2010 helped turn him into a billionaire. In 2018, he made Forbes magazine’s list of China’s richest people, with a reported net worth above $1.1 billion.

Over time, Mr. Wen took on more risk, pledging his shares to borrow more and finance bigger projects. A government “deleveraging” campaign launched under Mr. Xi to curb excessive risk-taking forced companies to pare back on debt and caused stock markets to swoon, sending the value of Mr. Wen’s shares down. His lenders started calling in loans.

Adding to Mr. Wen’s problems, the government in 2018 started to reverse an initiative that teamed private investors with local governments to build big-ticket infrastructure projects, citing fears of overspending. Companies like Mr. Wen’s were left with unfinished projects and debt that was maturing fast.

A subsidiary of China Communications Construction Co. , a big state contractor for Beijing-led infrastructure projects overseas, swooped in, buying a controlling stake in Beijing OriginWater for more than $440 million. Mr. Wen’s stake was reduced to around 10%, from 23%.

Now, instead of focusing on the domestic market, Beijing OriginWater says it plans to help facilitate the party leadership’s Belt and Road Initiative, a huge infrastructure program promoted by Mr. Xi to pull Asian, European and African nations into Beijing’s orbit.

Several longtime board members were replaced with appointees approved by the State-owned Assets Supervision and Administration Commission, which regulates and holds majority stakes in big state companies, including China Communications Construction.

A notice posted on the website of the company’s regulator late last year, when the China Communications Construction subsidiary began acquiring shares in Beijing OriginWater, lays out qualifications for project managers. Among them: Candidates must disclose their political affiliations and should have “unyielding fighting spirit.”

In response to questions, China Communications Construction described the acquisition of Mr. Wen’s firm as an “alliance of the strong.” Mr. Wen declined to comment.

In an interview with a Chinese weekly, China Times, last year, Mr. Wen likened state companies to trees and private firms to shrubs. “In the future, the trees may become larger and larger, absorbing more soil, water and sunlight,” he said. “The shrubs will be transformed, becoming either a branch on the tree or an herb, and the herb will die.”

Zhuji Water Group Co., a water utility run by a city government in the coastal province of Zhejiang, last year spent $147 million for a 28% stake in Zhejiang Great Southeast Co., a publicly listed plastic-packaging firm, after that firm ran into debt troubles.

The government of Zhuji has been trying to make Zhuji Water a conglomerate of sorts by having the company take over hotels, real estate and other assets. Its acquisition of the Great Southeast is also a way for Zhuji Water to get itself listed, a Zhuji official says.

Most often, though, government officials just want to make sure large private companies are adhering to the state’s goals and policies. To that end, the state is installing more Communist Party committees in corporate offices and encouraging them to play more assertive roles in decision-making.

Sanyue Industrial Co., a private maker of electronics in the southern city of Dongguan, in October formed the first party committee in the company’s 11-year history. It did so after the government told the company it needed to, says company executive Huang Shengying.

The committee, which is made up of five party members who were already working at the company, including two from management, plans to meet often to “study the spirit” of government policies and Mr. Xi’s speeches, Ms. Huang says. “We need to understand the policy better to survive. Party building, we’re told, is good for corporate development.”


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Posted by uncensored > 2022-01-25 00:29 | Report Abuse

Three other private companies in Dongguan also set up party cells recently, including an electronics maker, an auto-parts manufacturer and a chemical company. A Dongguan official, Zhao Zhijia, calls the party committees “red charging stations” saying that “these companies will integrate party building into their corporate culture. It’s a win-win.”

Such party committees often trump the decision-making of corporate management and boards. A party cell at Baowu Steel Group, a state-owned company that is China’s largest steel producer, held 55 meetings in the past two years and reviewed some 137 business and other proposals submitted by management, according to company filings. It revised 16 of the proposals before sending them on to Baowu’s board of directors.

It also turned down some, including one involving a fundraising proposal for a company subsidiary, saying the need for more capital was unclear, according to an article posted on Baowu’s website.

The party committee has directed the company to set aside more funds to help the poor even though the profits of Baowu’s listed arm declined 42% in the previous year. Eliminating poverty is a top political objective of Mr. Xi.

Chinese officials say Mr. Xi doesn’t intend to crush entrepreneurship or eliminate market forces. He has promised to support the private sector, which contributes half of the government’s tax revenues and employs 80% of urban workers.

Unlike his predecessors who steadily expanded the private economy, Mr. Xi focuses on bringing entrepreneurs into the party’s fold.

Chinese officials close to the leadership say Mr. Xi’s thinking has been influenced by excesses that emerged under predecessors Jiang Zemin and Hu Jintao, when corruption and environmental degradation were rampant, and by market disruptions that rattled Mr. Xi in the early years of his rule.


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Posted by uncensored > 2022-01-25 00:32 | Report Abuse

Initially, Mr. Xi had been open to advancing market reforms that began in China under Deng Xiaoping in the 1980s. In late 2013, Mr. Xi’s leadership vowed to give market forces a “decisive role.” He blessed market-minded regulators who talked up stock investing and relaxed government control over China’s currency. His administration even pondered a proposal to have professional managers rather than party apparatchiks run state companies.

One after another, those reform plans led to chaos. In the summer of 2015, a big stock-market selloff pounded markets and embarrassed Mr. Xi. The central bank’s move to set the Chinese yuan freer spooked the public further.

In closed-door meetings with underlings, Mr. Xi made his displeasure clear, according to the officials close to the leadership, and unleashed state forces to fix what he saw as the market’s woes.

Senior state-sector officials successfully lobbied Mr. Xi’s leadership to scratch plans to bring more market-oriented managers to state companies.

Beijing now directly supervises 128 state firms. Although that is down from about 140 in 2012, the enterprises have grown larger, encroaching more on the private sector, amid government-led consolidations aimed at creating national corporations. Local governments manage thousands more of the firms.

Until last year, Xu Zhong was head of the research department of China’s central bank. He publicly blamed China’s poor governance and market distortions on the state’s hand in allocating credit, which had caused private firms to be deprived of financing.

“The first institutional problem that leads to financial chaos is unclear boundaries between government and the market,” he wrote in an article published in December 2017. In a high-level economic forum in February 2019, he called for accountability of the government when it came to market reforms.

Shortly after that, he was moved to a new role outside the central bank in an association of market dealers.

“The market-reform camp is all but gone,” says an economist who advises the government. “By now, it’s pretty clear what kind of reform the top guy really wants.”

There was no mistaking the shifting winds in September, when Liu He, the leadership’s top economic adviser with a reputation for supporting market reforms, summarized Beijing’s plans for the state sector for the next three years.

“State-owned enterprises,” he said, “must become the competitive core of the market.”


2,694 posts

Posted by uncensored > 2022-01-25 14:11 | Report Abuse

China Clamps Down on Homegrown Tech Giants Amid Nationalization Drive
Government curbs on the activities of online service providers come as the ruling party forges ahead with nationalization.


2,694 posts

Posted by uncensored > 2022-01-27 14:35 | Report Abuse

Coronavirus: US diplomats wanting out of China risk 'leaving safest country in the world' in a pandemic, Beijing says
Wed, January 26, 2022, 5:30 PM·5 min read

China has protested against a US move to pull out consular staff and their families to avoid pandemic control measures in the zero-Covid nation, saying US diplomats risk leaving the "safest country in world".

This comes after the US embassy in Beijing sent a departure request to Washington for a formal sign- off, as China ramps up Covid-19 containment protocols ahead of the Beijing Winter Olympics starting in 10 days.

Highlighting China's efficient control of the pandemic, the Chinese foreign ministry called on Washington to "seriously think through the issues of granting authorisation for the departure of diplomats".

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

"China is undoubtedly the safest country in the world [in terms of Covid-19 prevention]," ministry spokesman Zhao Lijian said on Wednesday, warning that departure would "only elevate the risk of infections among the Americans [leaving]."

"China has expressed solemn representation and dissatisfaction to the US," Zhao told a daily press briefing in Beijing.

"We hope the US can abide by and follow China's pandemic control measures, seriously understand China's position and concerns, and cautiously handle the so-called authorised withdrawal of diplomats," he added.

Covid-19 cases in the US soared above 600,000 on Tuesday as the Omicron variant sweeps the country. China reported 44 cases, 24 of them locally transmitted.

A source told the Post that the US move on Monday was possibly a response to concerns raised by its diplomats in China, and unlikely to trigger major changes to the operations of the American embassy and consulates there.

Beijing Olympic torch relay shortened as city records more Covid cases
The first reports about the US State Department weighing whether to authorise such departures came from Reuters, which cited unnamed sources as saying that some embassy staff were upset about Washington being unwilling or unable to secure diplomatic exemptions from the strict quarantine measures.

The rules include possible admission to Covid-19 fever clinics and separation from children.

However, the State Department said operating status at its embassy and consulates in China had not changed.

"The operating status at our mission in [China] has not changed. Any change in operating status of this nature would be predicated solely on the health, safety, and security of our colleagues and their family members," a spokesman told Reuters.

US-China relations have been fraught for the past few years, with the most recent spat relating to Covid-19 controls for aviation.

The US government on Friday said it would suspend 44 China-bound flights by four Chinese carriers in response to Beijing's decision to suspend some US airlines' flights over Covid-19 concerns.

Since December 31, Chinese authorities have suspended 20 United Airlines, 10 American Airlines and 14 Delta Air Lines flights, after some passengers tested positive for Covid-19.

Beijing hit back at the suspension of Chinese lights, calling on the US "to stop disrupting and restricting normal passenger flights".

With the 2022 Winter Olympics just days away, Beijing has been stepping up pandemic control measures, especially after recent Covid-19 flare-ups in the capital and nearby port city of Tianjin.

Foreign diplomats in China must abide by all Covid-19 restrictions, such as nucleic acid testing and mandatory quarantine on arrival, although some foreign envoys have not been sent to government-designated quarantine hotels.

An internal survey by the US embassy in Beijing showed that a quarter of its staff and their families would prefer to leave China as soon as possible, the Reuters report said.

Home quarantine for diplomats should be a baseline requirement, and admission to Chinese fever clinics and hospitals should be voluntary, it quoted a source as saying.

The US government should have imposed retaliatory measures for such requirements but failed to do so, the source said.

The coronavirus pandemic has become a new point of friction in US-China ties, with US officials repeatedly calling for an investigation into the origin of Covid-19. This comes on top of tussles over trade, big tech, maritime disputes in the South China Sea and alleged human rights violations in Xinjiang.

US money or Chinese public's fury: the stark choice for China's apparel firms
But the two sides have managed to continue high-level dialogue to calm tensions.


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Posted by uncensored > 2022-01-27 14:40 | Report Abuse

"When it comes to the movement of diplomats, China will certainly continue to adopt a non-discriminatory policy, and the restrictions due to epidemic considerations will not be weakened," he said.

"China will only decide our prevention and control measures in response to the overall control of the outbreak."

Nicholas Burns was sworn in as the new US ambassador to China on Tuesday. Burns' appointment had been held up for months over Republican demands that the US pass a bill to counter Beijing's alleged human rights abuses in Xinjiang.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.


2,694 posts

Posted by uncensored > 2022-01-29 12:57 | Report Abuse

In Kazakhstan: China invested $27B but now Russia gains more say including the oil pricing power

China Insights
149K subscribers

At present, Beijing is surrounded by a circle of so-called hostile forces, including Japan, Taiwan, India, and some countries in the South China Sea. If Kazakhstan in northwestern China turns to Russia, Beijing will find itself in an even more vulnerable situation.

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Copyright @ China Insights 2021. Any illegal reproduction of this content in any form will result in immediate action against the person(s) concerned.


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Posted by uncensored > 2022-01-30 14:34 | Report Abuse





2,694 posts

Posted by uncensored > 2022-02-19 14:40 | Report Abuse

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