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Strategies & Market Trends : True face of China -- A Modern Kaleidoscope -- Ignore unavailable to you. Want to Upgrade?

To: cyberslam who wrote (2971)	3/7/2008 11:19:48 AM
From: RealMuLan	Read Replies (1) \| Respond to of 12464

You perhaps do not have idea how these foreign capitals eating out Chinese SOEs wealth. They usually start from 49% or less ownership (due to Chinese regulation), using the price transfer techniques to transfer ALL the profit (including the 51% of China state-owned profit to their parent companies overseas, so these JV companies would report millions of dollars loss year after year after year. Since these are JVs, Chinese gov. also had to pay for the loss, but they run out of cash, so had to sell their 51% of majority of shares. There are thousands of thousands of SOEs in China have been stolen away by foreign capitals. >85% of foreign solely-owned or Joined venture companies in China reported FAKE loss in the last 2-3decades. The thing only start to get a little better in the last couple of years when China starts to crack down on the price transfer practice. But still more get away with it than get caught. There are some very good research (in Chinese) done on these kind of stealing. And for those outright sold out SOEs, since they used some models build by foreign bankers/economists, which significantly undervalue Chinese properties on purpose, so foreign capitals usually got a very good deal. They bought them, laid off all the workers at little or NO cost, held for several months, flipped them back to some other Chinese owners, made MILLIONS of dollars. It is such a shame, and so sad! I read that one of SOEs in HeNan Province sold to a HK business man, previously got >1000 workers, counted a 4 stories with 4 entrance (which had 48 sets of 1-3 bedroom apartments) apartment building for Only 100 Yuan on book! This kind of stealing has been going on ever since Deng’s open door policies. And there are thousands of thousands of SOEs like that being sold well below the book value. Often times to business crooks from HK, or other foreign countries. After those crooks bought those state properties, they close down the factories, laid off thousand of thousands workers. It is HEARTBREAKING!