China, International, Uncategorized

My thoughts on the Shenhua Group and China Guodian Corporation Merger

ANOTHER HUGE MERGER IN CHINA

The sheer size of this merger is incredible. According to the Wall Street Journal’s article from July 29, “Beijing Shows Its Power with China’s Latest Megamerger”, China Guodian has enough capacity to light up 183 million American homes. Total assets of the newly create assets will stand at $270 billion.

Many will be impressed by China’s ability to execute such huge mergers as Chinese government is continuing with its efforts to create a unique model of both command and market economy all in one.

COMMAND VS. MARKET ECONOMY – CHINA’S UNIQUE MODEL

History shows that planned (command) economies did not deliver and failed in their competition with market economies, former Soviet Union of course being the prime example.

CREDIT GIVEN WHERE CREDIT IS DUE

China deserves a lot of credit for attempting to create a model that is uniquely suitable for them rather than blindly copying the Western models.

However as the Journal says: “…in the long run, letting market signals dictate capital allocation rather than creating larger state-owned behemoths is a better way for China to reform…”

WILL CHINA SUCCEED?

Only time will tell if China will succeed with its unique economic experiment. In the meantime, it manages to captivate academics, governments and business people alike.

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China, Stock Markets

Go East – BlackRock Offers Vote of Confidence to China’s Stock Markets

Zhenzhen stock exchange 1.jpg

This has been a long time coming. It is true that not everyone is on board yet, but this is a significant step forward. The trend is clear.

I have been getting inquiries about opportunities in the Chinese markets from fund managers, so I can see additional funds following suit in the near future.

BlackRock Offers Vote of Confidence to China’s Stock Markets https://www.wsj.com/articles/blackrock-offers-vote-of-confidence-to-mainland-chinas-stock-markets-1492679391

*picture courtesy of the Wall Street Journal

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China, Sports, Uncategorized

After 30 years, Berlusconi chooses to cash in on AC Milan…and that’s a good thing

Be6BgE8cFollowing similar acquisitions in England and elsewhere, Chinese investors now own both legendary teams in Milan – Inter and AC Milan. Last Friday Bloomberg reported that the initial contract was signed and the deal is expected to be completed by the end of 2016.

Despite their iconic status, both teams have feel on hard times in recent years. Serie A is very popular in China and with this influx of money, the league has a new chance to return to its former glory. We have seen this happening in England and there is a reason to believe that the same can easily happen in Italy. As an AC Milan and Italy fan, I am excited.

 

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