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Chinese People's Chinese Enterprises — Will They Still Exist Next Year?

2006/9/11 18:10:41

A while ago I wrote some articles, all prefixed with "Acquiring China." Recently, after mingling with people running enterprises, I've found this problem has gone somewhat beyond acceptable bounds. The following cases are all things this ID has personally experienced during this period. Since the companies involved are all quite well-known, due to commercial confidentiality, even the industries must be concealed.

  1. A certain person from the capital market of a certain Asian country. Our first meeting was in a hotel on the north side of Chang'an Avenue. The topic of discussion was how to acquire the leading enterprise in a certain industry in China, and then create a bridging channel between the capital markets of both countries. What can also be mentioned is that this enterprise is listed on the Shanghai Stock Exchange, with its current stock price around 3-4 yuan.

  2. Still in Beijing, involving N tens of billions of US dollars. The funds were split into two parts: one targeting a project in a certain megacity in an industry currently under severe regulatory control, and the other for constructing something special in a famous southern coastal city. The background of these funds comes from an oasis in a desert of a certain major country.

  3. Still can't leave Beijing. This project involves M tens of billions of US dollars in its first phase, targeting one of the so-called most promising sunrise industries of the 21st century. The foreign capital background is the world's second-largest in this industry — the first has already basically completed its corresponding initial steps, and the second is already a latecomer. Their strategy targets two types of Chinese enterprises. One type they've made initial contact with is among the most newsworthy recently, and the other — I can tell you quite clearly — is a certain super-large state-owned enterprise that controls N listed companies on the Hong Kong and mainland exchanges.

The above are just some of the matters this ID has recently been involved in. This ID's principle is actually quite simple: these matters are all legal and comply with commercial principles. In any case, if this ID doesn't facilitate them, someone else will. The trend is what it is. What we're discussing now is: why has such a trend emerged? Is this trend truly inevitable? Must such things happen to serve China's national interests?

For comparison, let me cite an opposite case I also personally experienced:

A prize-winning scholar's star student, possessing a world-leading technological foundation in one of the hottest high-tech industries, returned to China but didn't receive sufficient and deserved support. Because this industry's R&D costs are staggering and talent requirements extremely high — you could grab anyone in this company and they'd be a PhD — they recently fell into difficulty due to a special reason: the original funding backing them ran into trouble. In truth, something this critical to the nation's technological future should have received strong state support from the beginning.

When this ID saw their helpless expressions, I truly had the impulse to give them money. But this ID's longstanding principle has been: apart from stocks and futures, no investments whatsoever. I'd violated this principle twice before, both times due to social obligations, and both times the results were utterly tedious. So I could only wish them good luck. But is the emergence of such situations truly inevitable? Of course, I won't invest, but help — this ID has resolved to help. These people can be such bookworms sometimes. For their sake, this ID even just did something I normally detest doing: playing mahjong. Silicon Valley is Silicon Valley; not the whole world is Silicon Valley.

In truth, this ID fundamentally doesn't want to mingle with these business people. Generally, it's the somewhat dim-witted who run enterprises, and when they actually succeed, the wolves close in — so why bother? This ID still adheres to the principle: apart from stocks and futures, no investments whatsoever. Therefore, from a personal standpoint, even if all Chinese enterprises became non-Chinese, it wouldn't really matter — this ID is guaranteed to win foreigners' money anyway, and has won plenty from foreigners before. But if one day, there's no longer any discernible difference between China's capital market and America's or Europe's, and the names of major shareholders of so-called Chinese enterprises no longer need to be written in Chinese — wouldn't that be a bit too nauseating? Chinese people's Chinese enterprises — will they still exist next year?