Shuli Ren’s View to 2022: Common vs. Uncommon Prosperity in China
(Bloomberg Opinion) -- What to Expect:
China has developed an uneasy relationship with big capital. The country’s uncommonly prosperous billionaires will continue to try to keep a low profile as President Xi Jinping promotes his “common prosperity” campaign, which aims to spread the country’s wealth and broaden the middle class. But there are many other potential areas of contention. The government is trying to promote high-end manufacturing. But big tech and venture capitalists would rather plow their money into sectors like social media and after-school tutoring — where the consumers are. At the same time, the country’s new rich are pushing asset prices — think buying multiple units of prime waterfront real estate in Shanghai — higher even as property developers wobble. So, the question for 2022 is: Can money and politics live in harmony?
From the Year Behind Us:
China’s Dangerous Rush to Resolve Property Crisis: Consider this thorny situation: You’re in a long-term relationship. It was great for a while, but your goals have changed. Do you have a respectful breakup, or just ghost your partner? This is the dilemma Beijing is facing with its indebted real estate developers, who at one point served an important social purpose.
Jack Ma's Famous Friends Will Cost Him Billions More: China’s most flamboyant billionaire and founder of Alibaba Group Holding Ltd, likes to party. He likes to dance and sing, and hang out with A-listers, who got rich through their connections with him. As it sifts through Ant Group Co.’s ownership structure, Beijing is asking why only certain people got to be early investors in the country’s most valuable fintech unicorn.
Why China is Sentencing a Tycoon to Death: His bigamy conviction got a lot of the attention but Lai Xiaomin, who oversaw China’s largest state-owned distressed asset manager from 2012 to 2018, received a death sentence over a much more serious issue. “He endangered [China’s] financial stability,” declared the court that handed out the harsh punishment.
Why Evergrande Is An Impossible Equation For China to Solve: Sometimes, you can’t blame Beijing for being mad at its billionaires. China Evergrande Group is poised to enter a tiresome debt restructuring. Evergrande’s biggest problem is that its working capital is tied to its inventory, composed largely of unfinished projects. Evergrande is a source of social instability.
How Not to Become China's Biggest Billionaire: These days, it’s not easy being a billionaire in China. Most prefer not being on the wealth rankings at all. How to avoid that unenviable fate? There are accounting tricks, from charity, dual-class shares, to conglomerate discounts.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.
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