Follow the money (part3): CCP steals private property
In this series we hope to uncover some of the 'trails of money' as well as the 'hidden' strategies and tactics behind what Chinese Communist Party (CCP) members are using inside and outside China to fuel their influence, power grab and enhance their personal wealth. (Part 1; Part 2 see below)
The Chinese Communist Party (CCP) members have always, as the self-proclaimed 'People's democratic dictatorship' one-party rulers of China, said and acted under the motto 'what is mine is mine, and what is yours is also mine'!
The outcome by 1949 of the CCP's civil war 'victory' over Republic of China's dictator Chiang Kai Shek has subsequently resulted in the death of at least 77 million Chinese citizens from the totalitatian CCP! Because CCP Chairman Mao Zedong had treasonously conspired with the Japanese Army, between the end of WWII in 1945 and CCP 'victory' in 1949, the outcome sadly was of course even more deaths for the citizens of China!
CCP has never been held accountable for the 'genocide' of its own citizens. CCP is the world's worst ever totalitarian regime!
But, sorry, I digress!
ICCPR article 1 gives everyone their human rights of ownership and sale of private property. CCP has signed but not ratified ICCPR: i.e. the laws and enforcment of China's laws should not be in conflict with ICCPR, but remain so.
Here's part of the current problem for expansionist nationalist CCP Emperor Xi Jinping: Vast amounts of money have been squandered by CCP on often unrealizable ,corrupt foreign debt-trap imperial 'Belt and Road' projects around the world; CCP's liability for sourcing and spreading the global pandemic COVID-19 which has wrecked the global economy (January 2021 USD16 Trillion and counting); an unresolved 'trade war' with its biggest customer and world's only superpower USA. This means that CCP finds itself with few friends, little income, little foreign reserves, 1.4 billion mouths to feed of which at least 92 million are extremely hungry corrupt CCP members who's sole job is to keep the Emperor in power; if they (or the party) can not make money CCP members will drop him and he is history, and likely so is CCP.
CCP's 'nationalization' strategy: China has serious financial problems. Likely Emperor Xi Jinping and CCP faction pals will grab assets from private business owners, e.g. Alibaba, under the disguise of a CCP 'nationalization' program: since he is the Emperor of course he and his pals will strip off whatever they want for their own pockets first!
Land reform in China: CCP's unfulfilled promise to peasants
Student movement CCP, heavily funded by foreign power the Soviet Union (USSR), came to power lead by Chairman Mao Zedong promising China's peasants land reform in exchange for their support: note CCP's 'revolution" was not a workers' revolution, it was a peasants revolution in which they never got what they asked for! Why is the end of Mao's socialism, capitalism?
Real lasting land reform providing full legal private ownership by villagers to their farm lands has never been completed in China.
To this day China has a big problem of land grabs by individual CCP members and oppression of villagers' land rights by police: of course money from land transfers often ends up in the pockets of individual CCP members.
Mao purged the 'landlords', redistributed land and the resultant effect of the 'Great Leap Forward' was mass starvation of villagers being unable to produce enough to feed themselves, the cities and for export!
Nationalize / grab private companies
After being chased by regulators, Moutai became Alibaba in liquor industry?!
Epoch Times 27 December 2020 by Cheng Mulan (Google Translator, format added)
Chinese stock 'Wang Guizhou Moutai' was suddenly issued a supervision letter by the Shanghai Stock Exchange on the evening of December 24, and was also rarely named by the Central Market Supervision Administration on the same day, requiring Moutai and other liquors to strengthen price control. The financial market was affected by this, and A-share liquor concept stocks plummeted.
This is the CCP's second move to pursue large profitable companies after investigating Alibaba. There are many reports in the market that Moutai has become the "Alibaba of the liquor industry."
Alibaba Group was alleged by the Chinese Communist Party authorities to be suspected of being a monopoly. It has been investigated by the State Administration of Market Supervision of the Communist Party of China. It is rumored that Jack Ma was also restricted from leaving the country. The incident shocked China and foreign countries.
Kweichow Moutai was named by two regulators overnight. On the 25th, the opening price of A-shares opened 1.5% lower, and the liquor stocks were all affected by the decline. At the close of the day, 19 of the 26 liquor concept stocks fell in price, and six of them fell more than 5%, including one at falling limit and three close to falling limit. Moutai once fell below 1,800 yuan, and the end-of-day decline narrowed, closing at 1,830 yuan per share.
On the evening of the 24th, the Shanghai Stock Exchange suddenly raised supervision against Moutai in Guizhou Province, but did not disclose the specific content. On the 23rd of the previous day, Moutai Group transferred 4% of its shares to the Guizhou State-owned Assets Supervision and Administration Commission for free, with a market value of 92.5 billion yuan, which attracted market attention.
On the 24th, the State Administration of Market Supervision and Administration of the Communist Party of China issued a notice requesting to strengthen market price supervision during the New Year's Day and Chinese New Year holidays in 2021, and pointed out that it will do its best to solve the problems of Moutai market hoarding and price hikes. On the 23rd, the regulatory agency also held a distribution guidance meeting in Renhuai, Guizhou, requiring Guizhou authorities, Moutai Group management and distributors to strictly manage self-discipline.
Expert: Deteriorating finances, authorities pressure companies to contribute to the treasury
According to the analysis, the frequent offenders of the CCP's regulatory agencies do not rule out deliberately creating public opinion pressure, which is to put pressure on large profitable companies to automatically donate blood to the government. Kweichow Moutai’s donation of shares also reflects the increasingly difficult financial situation of local governments.
The finances of various parts of the Communist Party of China have deteriorated rapidly in the past two or three years, and the weak economy has led to the exhaustion of fiscal and tax sources. According to official estimates, as of the end of 2020, the total balance of local government debt across the country will reach RMB 26 trillion. If the hidden debt is added, Wang Jian, a financial media person, estimates that the total local debt is between 85 trillion and 90 trillion, which is close to China's gross domestic product (GDP) for the entire year of 2019.
This is not the first time that Moutai Group has given shares to Guizhou State-owned Operation Company for free. At the end of 2019, 4% of the shares were transferred, with a market value of about 58.7 billion yuan. The market value of the two share transfers totaled 160 billion yuan. In the third and fourth quarters of 2020, Guizhou state-owned operating companies successively reduced their holdings, but did not disclose where they were going. Industry players questioned that it was to rescue the local government's financial gap.
Guizhou Province’s fiscal shortage is an indisputable fact. In 2019, the debt ratio reached 146%, the highest among all provinces in the country. Investors have been worried about its financial security and debt default. However, the provincial state-owned Maotai Group has always been regarded as a "cash cow." Since the beginning of this year, its share price has soared by nearly 60%, and its value has jumped to around 2.3 trillion yuan. It has become the world's consumer goods company and surpassed the boutique leader Louis Vuitton (LVMH).
Some experts said that Kweichow Moutai is not only a pure consumer product, but also has financial attributes. In the future, the chances of being asked to deal with local debt risks will be more frequent. In September 2020, Kweichow Moutai issued bonds to acquire part of the equity of Guizhou Expressway, playing the role of financial aid to local infrastructure.
Chinese Official Singles Out Jack Ma's Ant Group Amid Fintech Probe Warning
RFA 8 January 2021
China's banking regulator has vowed to crack down heavily on the "disorderly expansion of capital" and "chaotic innovation" among tech companies providing financial (fintech) services including Ant Group, as the company's founder, tech tycoon Jack Ma, remains out of the public eye amid mounting speculation that he has been detained by the authorities. "We must ... vigorously break up monopolies, prevent the disorderly expansion of capital, and promptly and strictly punish violations of the laws and regulations," the China Banking and Insurance Regulatory Commission was quoted as saying by state-run media. It said there would be severe crackdowns on "pseudo-innovation" and "chaotic innovation," and zero tolerance" for online service providers breaking the law. "There may be a limited transition period, but the general policy direction will not change," the Economic Information Daily, a newspaper under the aegis of the state news agency Xinhua, quoted a department head at the Commission as saying in a Jan. 4 report. The ruling Chinese Communist Party (CCP) recently took steps to curb e-commerce giant Alibaba with the launch of an antitrust investigation into the tech company also headed by Jack Ma. The wording of the report seems to have come down from the highest levels, suggesting that the regulator is warning the industry of a major shake-up after regulators pulled the plug on Ma's Ant Group New York IPO at the eleventh hour in November 2020, hauling Ma in for questioning. A December article in the CCP's official mouthpiece, the People's Daily, reported that the CCP's Politburo was of the opinion that the government should "strengthen anti-monopoly work and prevent the disorderly expansion of capital."
Plans to nationalize Sources have told RFA that the ongoing investigations into Ma and his companies is part of CCP plans to nationalize both Ant Group and Alibaba. According to the banking regulator, the rapid development of China's financial technology industry is threatening financial stability and online security, and there are issues centering on both individuals and the sector as a whole. “Recently, the four central financial management ministries and commissions once again interviewed Ant Group," the Economic Information Daily quoted the department head as saying. "They emphasized that the outstanding issues needing rectification are both individual and universal," the official said, calling on online service providers to start the process of "rectification" themselves, and await further inspection. "Financial innovation must be carried out under prudent supervision," the official said. "We will effectively maintain financial stability and security." The article, with its reference to Ma's Ant Group, comes amid mounting speculation over Ma's whereabouts and status in the eyes of the CCP. The Financial Times reported on Friday that the CPP propaganda department had directed media outlets to stick to government-approved statements on the probe into Alibaba. "If any company announcements oppose the official stance, do not publish, do not re-post, do not quote foreign media," the paper quoted the directive as saying, citing two people who had seen it.
Disappeared Ma hasn't been seen in public since the suspension of the Ant Group IPO, and political analysts are beginning to draw parallels with the case of kidnapped billionaire Xiao Jianhua amid allegations of unauthorized lending, as CCP General Secretary Xi Jinping moves to strengthen the domestic economy. Xiao is believed to have been abducted by mainland Chinese state security police from his apartment in Hong Kong's Four Seasons Hotel in January 2017. Economist Law Ka-chung said Beijing is likely moving against Ant and Alibaba because they have become too powerful. "The Chinese Communist Party may feel that the platforms owned by Ant and Ali control the lion's share of data nationwide, including personal details of nearly everybody, as well as a huge amount of money," Law told RFA. "They have access to huge sources of funding, and are powerful enough to negotiate with the regime," he said. "Their handling of Jack Ma isn't just about an antitrust investigation; it's also about the concern that he could be a threat to CCP rule," he said. "It's not just about economics; he may be seen as a political threat." "Politics trumps everything, as far as the CCP is concerned; it has always been their top consideration," Law said. Feng Chongyi, an associate professor at the University of Technology Sydney (UTS), drew parallels with banking tycoon Xiao Jianhua. "This is similar to [what happened to] Xiao Jianhua; [like Xiao, Ma] may also be under house arrest," Feng said. "All we can be sure of on the outside is that he is under a travel ban ... but many people think he is under restrictive measures," he said. "If that's the case, then they will be investigating all of Alibaba's finances and operations, shareholders, and so on."
Investigations under way Industry analysts have told RFA they believe that the investigations will result in the nationalization of both Ant Group and Alibaba. Central government investigators had already set up camp in Alibaba headquarters by the end of November, according to industry sources. The company will also be called to follow-up meetings with the People's Bank of China, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the State Administration of Foreign Exchange after regulators slammed the brakes on Alibaba's New York listing in early November. Investigative teams are also in place at the offices of social media giant Tencent and e-commerce company Meituan. Analysts say the Alibaba investigation will help the CCP to form future policy towards the country's tech giants. State media have been keen to paint the government's targeting of Ma's tech empire as a campaign to subject the nation's super-rich to public scrutiny and regulation. CCP general secretary Xi Jinping unveiled plans at the end of October to move China to a state-controlled, "circular" economy based on domestic demand, and away from the export-based model that has fueled rapid growth since 1979, when late supreme leader Deng Xiaoping ushered in four decades of market-based economic policy. Analysts have said there is a widespread expectation that Xi will move to change the current system of property ownership. Reported by Gao Feng for RFA's Mandarin and Cantonese Services. Translated and edited by Luisetta Mudie.
Caixin 25 December 2020 'Billion-Dollar Stake in Liquor-Giant Moutai Handed to Local Government Firm, for Free'
RFA 25 December 2020 'China Moves Towards Nationalization With Probe Into Alibaba'
RFA 4 November 2020 'China Pulls Plug on Ant Listing After Summoning Jack Ma'