[A-List] Bank Give Away

Henry C.K. Liu hliu at mindspring.com
Sun Jan 29 14:22:19 MST 2006


Aside from the bigger problem of dollar hegemony, China has injected 
US$100 billion into the four recently pirvatized commercial banks, of 
which ICBC is one, in order to take care of the non-performaing loan 
problems and to bring capital requirments to BIS standards. These used 
to be state-owned national banks before the central banks law was passed 
in 1995. But Chinese bankers told me thatn the sale to foreign investors 
in not based on the need for money, but to satisfy WTO requirements and 
to use foreign ownership to demolish domestic opposition to bank reform. 
With foreigners as partners, domestic politics is neutralized. Such is 
the semi-colonial mentality running through the Chinese buraucracy these 
days.  The day will come when all these idiots will be sent to May-7 
reform school all over again as they were during the Cultural Revolution.

See:
http://www.atimes.com/china/DF01Ad05.html

Henry C.K. Liu

Michael Hudson wrote:

>Dear Henry,
>    The key in explaining to the Chinese why they have made a strategic
>mistake is to ask them, "What are you going to do with this $3.8 billion?
>Are you just going to buy US Treasury bills? What will they earn? Do you
>think you will ever end up getting paid?"
>    Michael Hudson
>
>
>On 1/29/06 1:29 AM, "Henry C.K. Liu" <hliu at mindspring.com> wrote:
>
>  
>
>>If 10% of ICBC, a bank that has 20% of the Chinese banking market and
>>21,000 branches, is sold for US$3.78, the total valuation of  the bank
>>is US$37.8 billion. This translated the total banking market of China to
>>be worth only US$189 billion.
>>
>>By buying 10% of ICBM for US$3.78, Goldman and Co bought 2,100 ICBC
>>branches for US$1.8 million each.
>>
>>Those who run the Chinese banking sector must be very stupid.  Its the
>>Year of the Dog alright!
>>
>>Henry C.K. Liu
>>
>>
>>
>>
>>ICBC to seal stake sale to foreigners: report  
>>2006/01/27 08:31  
>>
>>  Industrial and Commercial Bank of China (ICBC) is expected to seal a deal in
>>Beijing  
>>  today to sell a combined 10 per cent stake to three foreign strategic
>>investors for 
>>  US$3.78 billion, market sources said.
>>    Under attack for looking more like financial investors, Goldman Sachs,
>>Allianz Group and
>>  American Express have drastically enhanced the strategic element of their
>>share 
>>  acquisition proposals, including a large capital contribution from the
>>United States  
>>  investment bank.
>>    "There has been a big increase in the strategic focus since this was first
>>reported," 
>>  said a source who was briefed on the situation.
>>    Instead of forming a consortium, as previously expected, the investors
>>will sign  
>>  separate investment and strategic co-operation agreements with China's
>>largest commercial
>>  bank, which has about 20 per cent of the banking market and 21,000 branches
>>throughout the  
>>  country.  <SCMP>
>>  
>>
>>
>>
>>    
>>
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