Hmmmm....In that case, where is China's own sphere of influence?
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Chinese Economics Thread
- Thread starter Norfolk
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Alibaba was fined $2.8billion actually.Alibaba and tencent violated monopoly laws and they were fined a whopping few "million" yuan and none of the them were asked to divest from the acquired companies.
It's the largest ever fine in China for a company true. Not even foriegn companies have been fine anywhere close to this amount in China, and they too have not been angels in thier operations in China. Funny enough even Tencent who did the same thing as Alibaba was not fined anywhere near that amount(if anything at all). So why Alibaba was singled out? I think it was probably to set an example for others I.e deterrence as one member said before on here and also the fact that he was too much of a public figure, extravagant and even cocky. The dude even went as far as criticising China's financial regulatory authorities publicly for being "behind the times". Good thing Xi Jinping shut him up. Now nobody hears about him again and alibaba has lost over 60% of its value since then. Serves him right.
I think the markets reacted badly towards China's own crackdown on private companies unlawful behaviours because they wrongly believe it was/is more political in nature . Since I think they were no real defined regulatory laws towards new tech industry which proped up so suddenly/fast in China, so authorities were slow in reacting to that, since Chinese internet companies rose so big so fast that state authorities were slow to react and enact concrete laws to regulate the industry, so I won't blame only the private sector here to be honest. Anyway, Chinese authorities are catching up though, and seems new laws have been created to do just that now. Better late than never.The kind of things they have been doing in China would attract hundreds of millions in fines if not billion had they were doing it in west ( eu fined Google 2.5 billion afaik).
Unfortunately, the markets have reacted very badly to this, reason many private chinese tech companies in the industry are facing low valuations compared to before and VC finance has dried up due to this, which is unfortunate. Hopefully things will improve in future now that things have stabilised.
Actually Alibaba is divesting from most of the companies they acquired, I think we all know why they are doing that.none of the them were asked to divest from the acquired companies.
Not sure how true that is, but I can say that they are far more generous with state owned ones by far and rightly so. State owned companies offer more stability and are easier to control by the government, so they will follow government policies without any reluctance unlike private companieswho might be against some government policies if it goes against the company's interests. Which makes it easier for the government to fine tune its industries they way they want. So it's a good thing, but yeah I agree that there are also disadvantages of having a very large state owned companies dominating most sectors in a country's economy, just have to find a balance.Seriously the Chinese govt is far too generous to it's private big businesses
It does depend though, some areas really should only be owned and operated by a state owned company (national rail, oil, energy and probably maybe also critical minerals etc.).Not sure how true that is, but I can say that they are far more generous with state owned ones by far and rightly so. State owned companies offer more stability and are easier to control by the government, so they will follow government policies without any reluctance unlike private companieswho might be against some government policies if it goes against the company's interests. Which makes it easier for the government to fine tune its industries they way they want. So it's a good thing, but yeah I agree that there are also disadvantages of having a very large state owned companies dominating most sectors in a country's economy, just have to find a balance.
Ofc, when the above is the case, there needs to be steps taken so that the state owned companies aren't just resting on their bottoms, but still innovating and pushing things forward.
As an example, the big state owned oil company is pushing forward in terms of hydrogen technologies (see some of what @tphuang has posted in say climate change thread and renewable thread).
Profits earned by China's industrial firms dropped by 21.4% from a year earlier to CNY 1,516.74 billion in the first three months of 2023, as factory activity struggled to recover from the slump caused by pandemic disruptions. The decline followed a 22.9% plunge in the prior period and a 4% fall in 202, with profits falling at both state-owned firms (-16.9% vs -17.5% in Jan-Feb) and the private sector (-23.0% vs -19.9%). Among the 41 industries surveyed, 28 saw losses, namely petroleum, coal (-97.1%), non-ferrous metal smelting and rolling (-57.5%), computer, communication, and electronic equipment (-57.5%), chemical products (-54.9%), textile (-34.0%), non-metallic mineral product (-30.6%), automobile (-24.2%), agricultural and food processing (-18.4%), special equipment manufacturing (-10.1%), coal mining and washing industry (-4.9%), and oil and natural gas extraction industry (-4.8%). Meantime, ferrous metal smelting and rolling processing turned from profit to loss.
source: National Bureau of Statistics of China
source: National Bureau of Statistics of China
Not really, they are trying to go the Google method, split into multiple companies but are all owned by a holding company (like how Alphabet owns Google)Actually Alibaba is divesting from most of the companies they acquired, I think we all know why they are doing that.
China directly went to war with USA during Korean war to avoid a direct border with US forces.Hmmmm....In that case, where is China's own sphere of influence?
Sino Vietnam war. China launched an offensive in response to Vietnam's actions against the Khmer Rouge in 1978, which ended the rule of the Chinese-backed Khmer Rouge in combodia.
( Sk THAADs incident or south China sea can be considered weak examples ig but nonetheless)
Sure the level is not as much as USA OR RUSSIA but that's just because those two countries have spent considerable time and energy in their military. Just because china don't exercise it to that extent doesn't mean that large nations don't want a sphere of influence.
That isn't forced divestment, had that were the case similar reports from tencent would have emerged too.Actually Alibaba is divesting from most of the companies they acquired, I think we all know why they are doing that.
They still are the owner, just spinning them off to raise money for individual companies within the parent company