[The Epoch Times, November 3, 2022](The Epoch Times reporters Cheng Jing and Luo Ya interviewed and reported) Recently, Tencent and JD.com, the two largest private enterprises in China, have been “jointly operated” by large state-owned enterprises. The analysis believes that after the 20th National Congress of the Communist Party of China, the “public-private partnership” is expanding and accelerating, and more large private enterprises will be jointly operated by state-owned enterprises, and large private enterprises will become “lambs to be slaughtered”.
Two private enterprises are “joint venture” by state-owned enterprises
On the afternoon of Wednesday (2nd), the official website of the General Administration of Market Regulation of the Communist Party of China disclosed that the new joint venture case between the state-owned enterprise Unicom Innovation and Venture Capital Co., Ltd. and Shenzhen Tencent Industrial Venture Capital Co., Ltd. was unconditionally approved, and the trial was concluded on October 18.
The newly established joint venture intends to be mainly engaged in content distribution network (CDN) and edge computing business. After the transaction is completed, China Unicom Ventures, Tencent Industrial Investment and relevant employee stock ownership platforms will hold 48%, 42% and 10% of the equity of the joint venture respectively, and China Unicom Ventures and Tencent Industrial Investment will jointly control the joint venture.
After the news was announced, China Unicom’s A shares rose directly in late trading, closing at 3.75 yuan per share, up 9.97%. H-shares China Unicom and Tencent Holdings both rose slightly.
All parties claim that the new company established by Unicom and Tencent does not involve changes in the parent company’s equity, but there are concerns among the people that Tencent, a private enterprise, will be nationalized.
Zhu Changming, a partner of Sunshine Times Law Firm and head of the state-owned enterprise mixed reform research center, told Jiemian News that, in fact, the parent company of state-owned enterprises has increased capital and shares, equity transfers and new companies to private enterprises.
Not only China Unicom and Tencent, but also Shanghai Mobile and JD.com have signed a “strategic cooperation agreement”, and the scope of cooperation is related to data centers, cloud computing, big data or network security.
Alibaba also reported that it signed a strategic cooperation agreement with China Telecom, but China Telecom clarified a few days ago: “Signing a strategic cooperation agreement with Alibaba on November 2” is a rumor.
After China Unicom’s mixed-ownership reform, its share price was cut in half
China Unicom started the mixed reform pilot as early as September 2016 and was regarded as a model of mixed reform. In August 2017, Wang Xiaochu, then chairman of China Unicom, announced the mixed-ownership reform plan, announcing the introduction of a number of strategic investors such as Tencent, Baidu, JD.com, and Alibaba to subscribe for China Unicom’s A shares. After that, China Life Insurance, Suning, and Structural Adjustment Fund, etc. join in.
After the mixed-ownership reform, the shareholding ratio of Unicom Group dropped from 62.7% to 36.7%, and the total shareholding ratio of 14 strategic investors was about 35.2%.
But after five years, what is the effect of China Unicom’s mixed-ownership reform? “Times Weekly” reported on Wednesday that from the perspective of performance, China Unicom only maintained basic growth every year, and did not burst out as strong as the industry expected.
According to Wind Financial Terminal data, from 2018 to 2021, China Unicom’s annual revenue did not exceed double-digit growth, and in 2019 it experienced negative growth. Its net profit growth also fell after the highs in 2017 and 2018.
Some relevant analysts pointed out that the cooperation between the two parties is what each wants. Tencent needs China Unicom’s sales channels, and China Unicom needs Tencent’s products, technologies and experience.
As far as the stock price is concerned, China Unicom is currently 3.75 yuan per share, which is nearly half the price of the previous fundraising issue. It can be said that it has firmly tied up various investors.
Current affairs commentator Wang He told The Epoch Times that this is a “chaotic reform” and that the mixed reform of state-owned enterprises went the wrong way and backfired. To say lightly, it is unsatisfactory; to say important, it is failure. But the authorities will never admit it. The joint venture between the two major private enterprises and state-owned enterprises, of course, has commercial interests to consider, but it is also a performance of political achievements, and the intention is multi-faceted.
Big private companies become “lambs to be slaughtered” or take the opportunity to cash out
Li Hengqing, an economist living in the United States, analyzed the Epoch Times that Xi Jinping wants the national economy to be completely under the leadership of the party, becauseIn the past few decades, private enterprises have become bigger and stronger,Jack MaDirectly criticizing the inaction of the CCP’s banking supervision system makes officials feel a political and economic crisis.
What will happen next?Li Hengqing said, slowly these private enterprisesOne by one will be eroded, and their assets will be “mixed reformed” to state-owned enterprises “bigger and stronger”, and become the “CCP”.A world-class” strategic state-owned enterprise.But can it really be bigger and stronger? he thinks,Certainly not. The CCP is building a large national fund for the chip industry. The last piece of chicken feathers is an example.。
Li Xi (pseudonym), who has won the top ten most influential bloggers in mainland China many times, told The Epoch Times that China’s economy will begin to shift to the stage of public-private partnership from 1953 to 1956. Micro-enterprises will be shut down and transferred, and commercial retail will be included in the supply and marketing system.
In the 1950s, the CCP’s public-private partnership forced many famous capitalists and businessmen to commit suicide by jumping off the building. Chen Yi, the mayor of Shanghai at the time, once asked, “How many paratroopers are there today?” This highlights the CCP’s cruelty and inhumanity towards private owners.
Times commentator Qin Peng said in the “Qin Peng Observation” program, “In fact, state-owned enterprises are eating away (private enterprises) in disguise, although it is not as ugly as a direct annexation.” New business (edge computing, etc.) is the future of high-tech companies, and so on. , Tencent will lose the future.
Some people familiar with the matter believe that this wave of joint ventures will accelerate next year. Although it is impossible to know which companies are targeted, there is no doubt that large private companies are now lambs to be slaughtered in the eyes of the CCP.
However, private enterprises are also very clear, Li Hengqing said, “The officialIn this way, they can launder their assets and transfer them away.With the news of the merger coming out recently, the major media in China have been applauding., JD.com, Tencent, and Alibaba’s stocks soared, and they just took the opportunity to cash out. “
Analysis of making state-owned enterprises bigger and appeasing small private enterprises: the contradiction of the CCP’s economic policy
After the 20th National Congress of the Communist Party of China, the pace of “public-private partnership” has been accelerated. Xinhua News Agency reported that on Monday (October 31), 11 groups of 20 units including COFCO and China Baowu signed contracts for specialized integration. The so-called professional integration refers to the concentration of resources to advantageous enterprises and main business enterprises through asset reorganization and equity cooperation.
“This move is an important means to speed up the optimization and structural adjustment of the state-owned economy,” said Weng Jieming, deputy director of the State-owned Assets Supervision and Administration Commission, at the signing ceremony.
But at the same time, it is still appeasing private enterprises. On Tuesday (November 1), the State Council Information Office of the Communist Party of China held a policy press conference on the “Regulations on Promoting the Development of Individual Industrial and Commercial Households”, saying that individual industrial and commercial households have now driven nearly 300 million jobs, of which the tertiary industry is a service. The proportion of the industry has exceeded 90%.
He Lifeng, head of the National Development and Reform Commission of the Communist Party of China, also wrote an article on the same day to improve the core competitiveness of state-owned enterprises, promote the development and growth of the private economy, support the development of small, medium and micro enterprises, and give full play to the decisive role of the market in resource allocation, and to better play the role of the government.
Wang He believes that these are all clichés. But the cliché shows that, first, China’s economy is in a mess and he is afraid of tossing. He Lifeng does not dare to act rashly and maintain the current policy.
Second, existing policies are inherently contradictory. If state-owned enterprises become bigger and stronger in the market competition, no one has any opinion, the competition is neutral; but state-owned enterprises are not relying on their own abilities, but “bigger and stronger” with the support of the CCP’s policies, attacking the private economy and foreign enterprises internally, and externally. It is a very wrong policy to cause Western countries to counteract.
Wang He said, with this policy, how can the private economy develop and grow, and how can small, medium and micro enterprises develop? It’s all empty talk and lies. In general, the CCP disregards the laws of the economy at all, starts from ideology, attempts to change the laws of the economy, and enforces some kind of “Chinese-style modernization”, which harms the country and the people and harms the world.
Responsible editor: Gao Jing#