Posted on 07/02/2009 12:26:42 AM PDT by bruinbirdman
Cash-strapped executives round the world have looked on with envy as China's banks laid open their vaults this year, pouring trillions of yuan into Chinese businesses. China seems to be the one place where thousands of companies desperate for financing have been able to secure it.
Just one catch: Almost all those companies are government-owned. Many of China's private entrepreneurs are still starving for cash, and those who have been trying to muscle into government-dominated business sectors are getting their comeuppance. State-owned enterprises are, the entrepreneurs say, eating them alive, acquiring private competitors at fire-sale prices or squeezing them out.
"Now the big brothers are trying to grab all the food and enjoy it by themselves," says Bao Yujun, president of the China Private Enterprises Association and former vice chairman of the All-China Federation of Industry & Commerce. "They don't want to leave any to the little brothers."
Consider airlines. One private carrier, East Star Air, went out of business in March after refusing to sell out to the parent company of Air China (the offer, rumored to be $23.5 million, was apparently deemed insulting by East Star's boss, Lan Shili). Another carrier, United Eagle Airlines, was on the brink of failure in March when, for $29 million, it was swallowed up by state-owned Sichuan Airlines, which promptly designated one of its executives as the new chief executive.
"Especially after the financial crisis, you can see that a lot of private enterprises, either they were sold to SOEs or they had to give up shares to SOEs," says Liu Jieyin, president of moneylosing Okay Airways.
Forced to ground its nine-plane fleet from December until late February, Okay Airways is seeking a tie-up with one of the state-owned airlines, Liu says, not just for the cash infusion but also for everything
(Excerpt) Read more at forbes.com ...
This is what Government Motors will do to Ford, and government health care to private care.
So the greatest of Chinese “capitalism” have their government-business bailout deals, too. [Little irony and sarcasm there. We’re surrounded by neo-commie plutocrats on all sides.]
“Now the big brothers are trying to grab all the food and enjoy it by themselves,” sounds like what obama will do soon.
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