6 ms·

China's tech weapon: Delay mergers for leverage, aid rivals

48 points by moose_man 4y ago

sposeray 4y ago
[dead]
est 4y ago
China's policy is always delay anything for leverage. Delayed trials, delayed licenses, delayed approvals, delayed justice, etc. There's a term "拖字决" dedicated for this kind of for-profit bearucratic behavior dates back for centuries.
idiotsecant 4y ago
Oh no, what will we do if mega-conglomerates can't merge to form ultra-conglomerates to more efficiently rent-seek and suppress innovative newer entrants to their markets? Excuse me while I go wring my hands in worry.
- candiodari 4y ago
  Well it's clear in this case isn't it? This is done to strengthen the hand of the CCP, to allow China to expand further economically. So I guess if this can't happen, we'd all live under an oppressive mega-state, that has committed genocide on it's own people multiple times, at the mercy of local bureaucrats where you get arrested for comparing "leaders" to fictional characters. Or that's the goal in any case. All hail Xinni the Pooh!
alephnerd 4y ago
Not surprising. It's part of the general economic decoupling that is occuring between the US and PRC. This specific case is because of the (justified) increased oversight into Chinese IPOs in the US. Specifically, the issue was US regulators not being allowed to audit PRC operations of Chinese companies because to IPO, Chinese companies would create a parent org in the US that held a stake in the Chinese operations [0]. Because the SEC obviously didn't want companies potentially pulling an Enron, there was a crackdown on Chinese IPOs in the US in the 2019-2023 period, and these IPOs where overwhelmingly in the "tech" sector (which in reality is too broad a term. Even Luckin Coffee - a Chinese coffee brand - IPOed as a tech company). Tit-for-tat retaliation like this is pretty normal to be honest, and this kind of title editorialization around US-China business news is honestly really stupid. Hell, we in the US almost had a similar trade war with the EU because of the Inflation Reduction Act. [0] - https://www.lexology.com/library/detail.aspx?g=6c966b88-0395-44ae-95a3-92676b72f486 https://www.lexology.com/library/detail.aspx?g=6c966b88-0395...
- moose_man 4y ago
  The part where it is a war, is the demand that companies sell products in China that are on US sanctions list. That isn't typical. In order to get approved you have to do something that would undermine the US policy and have your firm hit with sanctions. I don't think pretending things are normal is helpful because it stifles the conversation on the huge fork in the road the US and China faces in terms of peaceful coexistence or all out war. If we're going to come to a peaceful solution then it is important that we have a real debate. What's at stake has to be clear. Otherwise we're all going to stumble into a war like in 1914. I think part of the reason the situation now is so dangerous, is that for business reasons, people kept insisting there were no stakes at all, that there was no conflict. So it's all been much quieter military buildup on both sides. Business says we need to make money, so the problem gets delegated exclusively to Pentagon which isn't as loud as the business lobby.
  - jpgvm 4y ago
    US will need to be the ones to start said war. China is forming the BRICS coalition which will see them completely sated in terms of energy and raw material needs for the foreseeable future. They have no need or desire for war, their economy, influence and power will grow even with full decoupling from the US. War if anything is the only thing that can disrupt that so they are increasingly unlikely to be an aggressor. Why try change the state of the game if you are going to win by default with enough time? At some point the US has to come to terms with the fact that the Western sphere of influence only covers a tiny portion of the globe and an even smaller fraction of it's population. They are the ones driving the division but are being left on the smaller and long-term ultimately weaker side of it in terms of economic and even military potential. They hold the upper hand for now but things don't look good if they keep moving in the same direction. It's a numbers game in the end the East has more people, more land, more resources and more motivation.
    - moose_man 4y ago
      I don't know if this is serious or not to be quite honest. But I think the South China Sea and Taiwan provide ample tinder to spark an inferno in the very near term like the next 5 years. https://www.reuters.com/world/china/china-builds-mockups-us-navy-ships-area-used-missile-target-practice-2021-11-08/ https://www.reuters.com/world/china/china-builds-mockups-us-... The point is, if no one knows what the stakes are, it becomes easy for an accident to escalate into a war. A plane collision leads to war, war-games around Taiwan lead to war. The military is on autopilot without a substantial debate about what the US should do. Neither side wants WWIII but neither did the people who stumbled in WWI. Even Hitler thought he would be able to take Poland without France or the UK intervening and was not happy when they declared war. There is no winner in WWIII. It's not a numbers game because we all die.
seatac76 4y ago
https://archive.is/hgfGg https://archive.is/hgfGg
deleted 4y ago
[deleted]
londons_explore 4y ago
Thought experiment: How would the world be different if mergers weren't possible at all? Ie. no company can agree to become a wholly owned subsidiary of another.
- x3n0ph3n3 4y ago
  It really does fly in the face of "corporate personhood" in a way that allows a kind of slavery over those persons.
  - nonethewiser 4y ago
    So close to realizing that corporations aren’t treated as people to the extent that is claimed.
    - x3n0ph3n3 4y ago
      If the Bill of Rights can be applied to corporations, then why not the 13th?
nonethewiser 4y ago
I don’t understand what power China has over these deals. Is it basically, “if you merge without our approval you can’t operate/sell here?” Take Microsoft/Activision for example > In addition, Microsoft Corp.’s planned $68.7 billion purchase of Activision Blizzard Inc., a videogame company, is also subject to Beijing’s lengthy merger scrutiny, among the reviews by other countries. Last year, China’s antitrust regulator declined the companies’ request to file the deal under a simplified and expedited procedure.
- x3n0ph3n3 4y ago
  > Is it basically, “if you merge without our approval you can’t operate/sell here?” That's exactly it.
  - nonethewiser 4y ago
    Interesting. I had no idea this was a thing. There is a lot of grey area in this dynamic. The article notes that they tend to just delay, not outright block. This signals it’s not actually in their interest to bar operations in China and makes me think there is at least some opportunity to ignore them. It also mentions other countries, which, with maybe a few exceptions, inevitably have far less leverage than China. Seems like its really just a rubber stamp in such cases.
hard_peking 4y ago
People here saying this has been happening for the last 10 or so years are misguided. Try 30 years, at the very least. China is playing a very long and slow game of destabilizing the Western world while pretending they’re stupid and unable to control things. A lot of the mishaps are manufactured by them to make them appear that way. Every time someone makes a comment about “how could China be so stupid?” they take a step forward knowing they are underestimated, aided by an online army that serves this purpose. People forgot all the things China did in early 2000s. Some that are posting on here weren’t even born yet.

48 points by moose_man 4y ago

[dead]

est 4y ago

China's policy is always delay anything for leverage. Delayed trials, delayed licenses, delayed approvals, delayed justice, etc. There's a term "拖字决" dedicated for this kind of for-profit bearucratic behavior dates back for centuries.

idiotsecant 4y ago

Oh no, what will we do if mega-conglomerates can't merge to form ultra-conglomerates to more efficiently rent-seek and suppress innovative newer entrants to their markets? Excuse me while I go wring my hands in worry.

candiodari 4y ago
Well it's clear in this case isn't it? This is done to strengthen the hand of the CCP, to allow China to expand further economically. So I guess if this can't happen, we'd all live under an oppressive mega-state, that has committed genocide on it's own people multiple times, at the mercy of local bureaucrats where you get arrested for comparing "leaders" to fictional characters. Or that's the goal in any case. All hail Xinni the Pooh!

alephnerd 4y ago

Not surprising. It's part of the general economic decoupling that is occuring between the US and PRC. This specific case is because of the (justified) increased oversight into Chinese IPOs in the US. Specifically, the issue was US regulators not being allowed to audit PRC operations of Chinese companies because to IPO, Chinese companies would create a parent org in the US that held a stake in the Chinese operations [0]. Because the SEC obviously didn't want companies potentially pulling an Enron, there was a crackdown on Chinese IPOs in the US in the 2019-2023 period, and these IPOs where overwhelmingly in the "tech" sector (which in reality is too broad a term. Even Luckin Coffee - a Chinese coffee brand - IPOed as a tech company). Tit-for-tat retaliation like this is pretty normal to be honest, and this kind of title editorialization around US-China business news is honestly really stupid. Hell, we in the US almost had a similar trade war with the EU because of the Inflation Reduction Act. [0] - https://www.lexology.com/library/detail.aspx?g=6c966b88-0395-44ae-95a3-92676b72f486 https://www.lexology.com/library/detail.aspx?g=6c966b88-0395...

moose_man 4y ago
The part where it is a war, is the demand that companies sell products in China that are on US sanctions list. That isn't typical. In order to get approved you have to do something that would undermine the US policy and have your firm hit with sanctions. I don't think pretending things are normal is helpful because it stifles the conversation on the huge fork in the road the US and China faces in terms of peaceful coexistence or all out war. If we're going to come to a peaceful solution then it is important that we have a real debate. What's at stake has to be clear. Otherwise we're all going to stumble into a war like in 1914. I think part of the reason the situation now is so dangerous, is that for business reasons, people kept insisting there were no stakes at all, that there was no conflict. So it's all been much quieter military buildup on both sides. Business says we need to make money, so the problem gets delegated exclusively to Pentagon which isn't as loud as the business lobby.
- jpgvm 4y ago
  US will need to be the ones to start said war. China is forming the BRICS coalition which will see them completely sated in terms of energy and raw material needs for the foreseeable future. They have no need or desire for war, their economy, influence and power will grow even with full decoupling from the US. War if anything is the only thing that can disrupt that so they are increasingly unlikely to be an aggressor. Why try change the state of the game if you are going to win by default with enough time? At some point the US has to come to terms with the fact that the Western sphere of influence only covers a tiny portion of the globe and an even smaller fraction of it's population. They are the ones driving the division but are being left on the smaller and long-term ultimately weaker side of it in terms of economic and even military potential. They hold the upper hand for now but things don't look good if they keep moving in the same direction. It's a numbers game in the end the East has more people, more land, more resources and more motivation.
  - moose_man 4y ago
    I don't know if this is serious or not to be quite honest. But I think the South China Sea and Taiwan provide ample tinder to spark an inferno in the very near term like the next 5 years. https://www.reuters.com/world/china/china-builds-mockups-us-navy-ships-area-used-missile-target-practice-2021-11-08/ https://www.reuters.com/world/china/china-builds-mockups-us-... The point is, if no one knows what the stakes are, it becomes easy for an accident to escalate into a war. A plane collision leads to war, war-games around Taiwan lead to war. The military is on autopilot without a substantial debate about what the US should do. Neither side wants WWIII but neither did the people who stumbled in WWI. Even Hitler thought he would be able to take Poland without France or the UK intervening and was not happy when they declared war. There is no winner in WWIII. It's not a numbers game because we all die.

seatac76 4y ago

https://archive.is/hgfGg https://archive.is/hgfGg

deleted 4y ago

[deleted]

londons_explore 4y ago

Thought experiment: How would the world be different if mergers weren't possible at all? Ie. no company can agree to become a wholly owned subsidiary of another.

x3n0ph3n3 4y ago
It really does fly in the face of "corporate personhood" in a way that allows a kind of slavery over those persons.
- nonethewiser 4y ago
  So close to realizing that corporations aren’t treated as people to the extent that is claimed.
  - x3n0ph3n3 4y ago
    If the Bill of Rights can be applied to corporations, then why not the 13th?

nonethewiser 4y ago

I don’t understand what power China has over these deals. Is it basically, “if you merge without our approval you can’t operate/sell here?” Take Microsoft/Activision for example > In addition, Microsoft Corp.’s planned $68.7 billion purchase of Activision Blizzard Inc., a videogame company, is also subject to Beijing’s lengthy merger scrutiny, among the reviews by other countries. Last year, China’s antitrust regulator declined the companies’ request to file the deal under a simplified and expedited procedure.

x3n0ph3n3 4y ago
> Is it basically, “if you merge without our approval you can’t operate/sell here?” That's exactly it.
- nonethewiser 4y ago
  Interesting. I had no idea this was a thing. There is a lot of grey area in this dynamic. The article notes that they tend to just delay, not outright block. This signals it’s not actually in their interest to bar operations in China and makes me think there is at least some opportunity to ignore them. It also mentions other countries, which, with maybe a few exceptions, inevitably have far less leverage than China. Seems like its really just a rubber stamp in such cases.

hard_peking 4y ago

People here saying this has been happening for the last 10 or so years are misguided. Try 30 years, at the very least. China is playing a very long and slow game of destabilizing the Western world while pretending they’re stupid and unable to control things. A lot of the mishaps are manufactured by them to make them appear that way. Every time someone makes a comment about “how could China be so stupid?” they take a step forward knowing they are underestimated, aided by an online army that serves this purpose. People forgot all the things China did in early 2000s. Some that are posting on here weren’t even born yet.