Wednesday, August 4, 2021

g-f(2)407 THE BIG PICTURE OF THE DIGITAL AGE (8/4/2021), CNN, China's biggest private companies are in chaos. It's all part of Beijing's plan


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Alert, The ruling Chinese Communist Party's terms
  • China's crackdown on private enterprise has wiped out more than $1.2 trillion in market value for many powerful Chinese companies and stoked fears about the future of innovation in the world's second largest economy.
  • But the end goal of Beijing's aggressive bid for control isn't about creating chaos. 
  • The government wants to make clear to its corporate champions that tapping capitalist markets is fine — as long as it is on the ruling Chinese Communist Party's terms.
    Lesson learned, Beijing's crackdown on private business is about control
      • "Ultimately, Beijing's crackdown on private business is about control," said Alex Capri, a research fellow at the Hinrich Foundation. "The main priority is about preventing behavior amongst private companies that could engender more independent and potentially non-conformist activities, which undermines Beijing's state-centric model."
                              Lesson learned, A major corporate shakeup
                                • Corporate China has been rocked by Beijing's reforms.
                                • No part of the tech industry has been spared scrutiny. 
                                • The crackdown is "unprecedented in terms of its duration, intensity, scope, and the velocity of new policy announcements," analysts from Goldman Sachs wrote in a research report last week that called the strategy a "rebalancing of socialism and capital markets.“
                                • "Chinese authorities are prioritizing social welfare and wealth redistribution over capital markets in areas that are deemed social necessities and public goods," they added.
                                    Alert, The risk of aggressive action in entrepreneurial spirit
                                      • Beijing's tactics carry plenty of risk. Along with the $1.2 trillion in market value that Goldman Sachs says has been wiped off of prominent stocks, analysts also point to concerns that the crackdown could kill China's entrepreneurial spirit — a critical piece of the country's economic liberalization and rapid growth.

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                                      Alert, The ruling Chinese Communist Party's terms
                                      • China's crackdown on private enterprise has wiped out more than $1.2 trillion in market value for many powerful Chinese companies and stoked fears about the future of innovation in the world's second largest economy.
                                      • But the end goal of Beijing's aggressive bid for control isn't about creating chaos. 
                                      • The government wants to make clear to its corporate champions that tapping capitalist markets is fine — as long as it is on the ruling Chinese Communist Party's terms.
                                        Lesson learned, Beijing's crackdown on private business is about control
                                          • "Ultimately, Beijing's crackdown on private business is about control," said Alex Capri, a research fellow at the Hinrich Foundation. "The main priority is about preventing behavior amongst private companies that could engender more independent and potentially non-conformist activities, which undermines Beijing's state-centric model."
                                                                  Lesson learned, A major corporate shakeup
                                                                    • Corporate China has been rocked by Beijing's reforms.
                                                                    • No part of the tech industry has been spared scrutiny. 
                                                                    • The crackdown is "unprecedented in terms of its duration, intensity, scope, and the velocity of new policy announcements," analysts from Goldman Sachs wrote in a research report last week that called the strategy a "rebalancing of socialism and capital markets.“
                                                                    • "Chinese authorities are prioritizing social welfare and wealth redistribution over capital markets in areas that are deemed social necessities and public goods," they added.
                                                                        Alert, The risk of aggressive action in entrepreneurial spirit
                                                                          • Beijing's tactics carry plenty of risk. Along with the $1.2 trillion in market value that Goldman Sachs says has been wiped off of prominent stocks, analysts also point to concerns that the crackdown could kill China's entrepreneurial spirit — a critical piece of the country's economic liberalization and rapid growth.


                                                                          Category 2: The Big Picture of the Digital Age

                                                                          [genioux fact deduced or extracted from CNN]

                                                                          This is a “genioux fact fast solution.”

                                                                          Tag Alerts those traveling at high speed on GKPath 

                                                                          Type of essential knowledge of this “genioux fact”: Essential Analyzed Knowledge (EAK).

                                                                          Type of validity of the "genioux fact". 

                                                                          • Inherited from sources + Supported by the knowledge of one or more experts.


                                                                          Authors of the genioux fact

                                                                          Fernando Machuca


                                                                          References


                                                                          ABOUT THE AUTHORS


                                                                          Laura He


                                                                          Laura He (@lauraliuhe, In, Facebook) is a reporter and digital producer for CNN Business.

                                                                          Laura He is a reporter and digital producer for CNN Business, based in Hong Kong. She covers news about Asian business and markets, with a focus on China.

                                                                          Before joining CNN, Laura He was a senior financial correspondent for South China Morning Post based in Hong Kong. Prior to that she worked for Dow Jones in both Hong Kong as well as San Francisco. In the U.S. she also worked for Forbes and wrote about Chinese entrepreneurs and venture capitalists in Silicon Valley. She started her career with Xinhua News Agency working in both Hong Kong as the chief financial correspondent and on-air reporter, as well as in Beijing as an editor.

                                                                          Laura He holds a Master's in journalism from Stanford University and speaks English, Mandarin, and Cantonese.


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