Tuesday, March 14, 2006
Wen gave a pretty important press conference yesterday at the NPC in which he said "...we must resolutely push forward reform and opening, walk the path of socialism with Chinese characteristics. Although moving forward will be difficult, we must not stop; the way back is a dead-end." So, things are about to get really interesting since this was clearly a very strong message intentionally telling the world that Wen is supportive of further reform. This stands in sharp contrast to, if not in opposition, to Hu's call for reviving Marxism. I don't know what prompted Wen to make this statement, but perhaps out of personal preference or pleads by his advisors (as well as Jiang's people) that Hu's leftism now needs some adjustments. Undoubtedly, this strong signal will give heart to those neo-liberal economists and reformers in the government, who had been feeling a bit defensive lately.
Wen also said that the bank listings will go forward, as expected. BUT, in answering the WSJ reporter's questions that "whether you will support Citibank's bid to acquire majority stakes in the Guangdong Development Bank?" His answer was "in the process of handling commercial banking reform, we must insist on two principles 1. THE STATE MUST HOLD MAJORITY CONTROL, which guarantees the control over a vital economic flow and prevents financial risks 2. strengthen management of the entire process of reform, perfect internal control and monitor and prevent the loss of state assets"
Man, the folks at Citibank must be feeling pretty painful tonight. With Huang Ju's absence, Wen's words are the law, so that's it for that deal. I think this will give the Societe General/Shougang combo a renewed chance of taking a minority stakes. Mm, what should they do? Well, if Citibank had been active in other bank deals (like with city commercials), I would just cut my losses with this deal. GDB is pretty crappy anyway. I would much rather hold high minority stakes in several good city commercials. But I haven't heard any Citibank deals on the horizon with other smaller banks, so this is all they got.......
The AWSJ piece on this topic says "The premier didn't answer a question about his views on Citigroup Inc.'s effort to buy a controlling stake in Guangdong Development Bank. The potential deal would require Beijing to ease its current 25% cap on foreign ownership of domestic banks." No, he answered it, he said "in the process of handling commercial banking reform...." not in the process of handling "state-owned commercial banking reform" which would indicate that the majority control rule only applies to the Big Four banks. His language suggests that the state controlling majority rule still applies to all commercial banks.
央视国际 (2006年03月14日 12:18)