News about CAOL, advance guard for something larger...
CHINA HEADS WEST FOR CASH
It was only a week or two ago that National Association
of Securities Dealers (NASD) Chair Frank Zarb returned
from Beijing talking about handshake deals in his
continuing quest to form international siblings for the
Nasdaq market — including at least one in China. (This is
the same fellow who has agreed to create a joint venture
privately-owned market with Softbank in Japan, and who
since has expressed the desire to take Nasdaq itself
public, as some kind of market within a market.)
Perhaps, then, it should come as no surprise that last
week brought an announcement that a U.S. company,
Cathayonline.com, has acquired Sichuan Torch
Information Technologies Co. Ltd., one of four Internet
service providers in Sichuan province. With mainland ISP
China.com recently turning to the public markets in Hong
Kong and the United States,you could see these
groundbreaking deals as the advance guard of something
larger coming up.
Sure enough, a few days later, an official from China
Unicom, the chief competitor to leader China Telecom,
was quoted in the Beijing Youth Daily regarding plans to
raise up to $1 billion in a dual registration in both Hong
Kong and the U.S. The proceeds are to be used for
cellular phone expansion. A different version of the story
was earlier carried in a Reuters dispatch in a Guangzhou
paper.
Add to this the government's moves to drop interest
rates and change securities laws to provide incentives for
increased brokerage trading at home, along with
Communist paper exhortations about how great the rising
markets are, and you have a new picture of China's view
of the role of the stock market in its economy.
The bad news: it seems to be manipulating its domestic
markets (watch out, Frank). The good news: it needs
foreign capital, and is increasingly interested in getting it
through global financial markets. I think we will see a
deluge of these deals in the next year, and although these
same tools are intended to save the Party, they will
provide increasing pressure on Chinese Communism.
Mark Anderson is the president of Technology
Alliance Partners, which provides consulting to
telecom and computing firms. The Next Files,
excerpted from Anderson's Strategic News Service
newsletter, appears every Monday.
Copyright 1999 Strategic News Service™. All rights
reserved. This material may not be published,
broadcast, rewritten or redistributed.
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