Make no mistake – the fall of Chinese private real estate giant Evergrande aligns with President Xi Jinping’s stated vision for the nation.
He commanded national firms to reclaim their position at the cornerstone of the Chinese economy during the 19th Party Congress in 2017, calling them “the pillar of the Chinese economy on whose success the party derives its material foundation and ruling legitimacy”.
Nonetheless, China's ascent in the global economy mirrors a continuously deepening privatisation. Statistics can reveal where the economic engine revs.
In 2019, private companies contributed approximately half of China’s tax revenue, more than 60 per cent of its GDP, 70 per cent of its R&D and innovation and 80 per cent of employment. That year, 90 per cent of Chinese corporations were private.
In this, Mr Xi sees an economically prosperous China that has ceded economic control from the state to private companies. Now he is driving to make the nation’s largest state-held firms more market-competitive while at the same time rolling back the private economy.
This has everything to do with the three phases that today anchor modern China. We are now at the start of the third phase.
The first three decades of the People’s Republic were characterised by the successful nationalisation of private companies. The following three decades then thrived on privatisation of state ownerships, rewinding the nationalisation achieved in the first 30 years.
In the three decades to come, China is likely to look at re-nationalisation of some fundamental drivers of the private economy, particularly data.
Already the government “invites” China’s largest private companies to invest in state-owned entities to enhance the latter’s global tech ambitions. Tencent invested in China Unicom, Geely in China Railway and Alibaba in China Broadcasting Network. These investments were strategically matched by the state.
In 2019, 43 Chinese private companies listed on the Chinese stock exchanges were nationalised to varying degrees, saved from the brink of debt collapse.
HNA, China’s most ambitious private conglomerate, was fully nationalised in January. Chen Feng, its founder and chairman, was formally indicted with criminal charges this week.
Anbang Insurance, China’s financial dark horse, turned Manhattan’s famous Wardorf Astoria into a Chinese-owned hotel when it bought it for a record $1.95 billion in 2015. But last year, China’s second-largest insurer faded into the history books in a total state takeover. Not even its name survived.
Anbang’s founder, Wu Xiaohui, father to the only great-grandson of the late reform leader Deng Xiaoping, returned $1.6bn to the state, and is to spend the next 18 years behind bars.
Wanda Group, China’s most recognised global brand, sold off nearly all its prized overseas assets, including AMC Cinemas.
Meanwhile, the rules dictating China’s use of capital have changed during the Xi Jinping era. China’s most prized industrial companies have been thriving on an exceedingly high-leverage model to fast balloon the assets – and liabilities – on the balance sheet. Their ambitions for expansion, backed by the state financial houses, went unbridled. But when the flow of financial resources towards them was no longer guaranteed, they all faced an inevitable fall. After all, it is sill the state banks that control finances in China.
Mr Xi's vision for a new model of economic justice should realign state capital to serve not only as liability holders, but shareholders when it comes the debt-ridden traditional industrial companies. The existing model enriches private individuals to the detriment of the state.
Evergrande is not the first – and won’t be the last – private giant to disintegrate. We have thus far witnessed the restructuring and re-nationalisation of Anbang and HNA by the state. The central government has proven it has the will, the confidence and, now, the experience, to manage Evergrande’s inevitable demise.
The government is unlikely to save Evergrande with a bailout. It would not need to. Evergrande exemplifies the exact kind of crony capitalism that Mr Xi is intent on exterminating. So three fates now face the company.
The first would be that Evergrande sifts through an aggressive asset liquidation and business acceleration process that would help it survive the current liquidity crisis.
The second would see the company suffer from a series of sudden and massive loan defaults, causing an immediate takeover by the state. Founder Hui Ka Yan could conceivably face criminal charges, as HNA’s Mr Chen did this week.
Third, without any controls, Evergrande’s fall would cause systemic financial shocks in China, which could also ripple through the global bond markets. This would risk triggering a wider crisis in the Chinese real estate supply chain and panic-selling among Chinese home buyers.
The second fate seems most likely. Had Evergrande not passed a debt inflection point, the company is still likely to have fallen under the current drive of state control over the strategic sectors of the Chinese economy. It would have arrived at the same tragic fate – without the theatrics.
Killing of Qassem Suleimani
Teaching in coronavirus times
South Africa squad
Faf du Plessis (captain), Hashim Amla, Temba Bavuma, Quinton de Kock (wicketkeeper), Theunis de Bruyn, AB de Villiers, Dean Elgar, Heinrich Klaasen (wicketkeeper), Keshav Maharaj, Aiden Markram, Morne Morkel, Wiaan Mulder, Lungi Ngidi, Vernon Philander and Kagiso Rabada.
Russia's Muslim Heartlands
Dominic Rubin, Oxford
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
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West Indies v England ODI series:
West Indies squad: Jason Holder (c), Fabian Allen, Devendra Bishoo, Darren Bravo, Chris Gayle, Shimron Hetmyer, Shai Hope, Evin Lewis, Ashley Nurse, Keemo Paul, Nicholas Pooran, Rovman Powell, Kemar Roach, Oshane Thomas.
Fixtures:
1st ODI - February 20, Bridgetown
2nd ODI - February 22, Bridgetown
3rd ODI - February 25, St George's
4th ODI - February 27, St George's
5th ODI - March 2, Gros Islet
Results:
6.30pm: Mazrat Al Ruwayah (PA) | Group 2 | US$55,000 (Dirt) | 1,600 metres
Winner: AF Al Sajanjle, Tadhg O’Shea (jockey), Ernst Oertel (trainer)
7.05pm: Meydan Sprint (TB) | Group 2 | $250,000 (Turf) | 1,000m
Winner: Blue Point, William Buick, Charlie Appleby
7.40pm: Firebreak Stakes | Group 3 | $200,000 (D) | 1,600m
Winner: Muntazah, Jim Crowley, Doug Watson
8.15pm: Meydan Trophy Conditions (TB) | $100,000 (T) | 1,900m
Winner: Art Du Val, William Buick, Charlie Appleby
8.50pm: Balanchine Group 2 (TB) | $250,000 (T) | 1,800m
Winner: Poetic Charm, William Buick, Charlie Appleby
9.25pm: Handicap (TB) | $135,000 (D) | 1,200m
Winner: Lava Spin, Richard Mullen, Satish Seemar
10pm: Handicap (TB) | $175,000 (T) | 2,410m
Winner: Mountain Hunter, Christophe Soumillon, Saeed bin Suroor
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The bio
Academics: Phd in strategic management in University of Wales
Number one caps: His best-seller caps are in shades of grey, blue, black and yellow
Reading: Is immersed in books on colours to understand more about the usage of different shades
Sport: Started playing polo two years ago. Helps him relax, plus he enjoys the speed and focus
Cars: Loves exotic cars and currently drives a Bentley Bentayga
Holiday: Favourite travel destinations are London and St Tropez
Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
The specs
Engine: 3.0-litre six-cylinder MHEV
Power: 360bhp
Torque: 500Nm
Transmission: eight-speed automatic
Price: from Dh282,870
On sale: now
ADCC AFC Women’s Champions League Group A fixtures
October 3: v Wuhan Jiangda Women’s FC
October 6: v Hyundai Steel Red Angels Women’s FC
October 9: v Sabah FA
Green ambitions
- Trees: 1,500 to be planted, replacing 300 felled ones, with veteran oaks protected
- Lake: Brown's centrepiece to be cleaned of silt that makes it as shallow as 2.5cm
- Biodiversity: Bat cave to be added and habitats designed for kingfishers and little grebes
- Flood risk: Longer grass, deeper lake, restored ponds and absorbent paths all meant to siphon off water
Dubai World Cup Carnival card
6.30pm: UAE 1000 Guineas Trial Conditions (TB) US$100,000 (Dirt) 1,400m
7.05pm: Handicap (TB) $135,000 (Turf) 1,000m
7.40pm: Handicap (TB) $175,000 (D) 1,900m
8.15pm: Meydan Challenge Listed Handicap (TB) $175,000 (T) 1,400m
8.50pm: Dubai Stakes Group 3 (TB) $200,000 (D) 1,200m
9.25pm: Dubai Racing Club Classic Listed Handicap (TB) $175,000 (T) 2,410m
The National selections
6.30pm: Final Song
7.05pm: Pocket Dynamo
7.40pm: Dubai Icon
8.15pm: Dubai Legacy
8.50pm: Drafted
9.25pm: Lucius Tiberius
UAE SQUAD
Mohammed Naveed (captain), Mohamed Usman (vice captain), Ashfaq Ahmed, Chirag Suri, Shaiman Anwar, Mohammed Boota, Ghulam Shabber, Imran Haider, Tahir Mughal, Amir Hayat, Zahoor Khan, Qadeer Ahmed, Fahad Nawaz, Abdul Shakoor, Sultan Ahmed, CP Rizwan
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The specs: 2018 Ducati SuperSport S
Price, base / as tested: Dh74,900 / Dh85,900
Engine: 937cc
Transmission: Six-speed gearbox
Power: 110hp @ 9,000rpm
Torque: 93Nm @ 6,500rpm
Fuel economy, combined: 5.9L / 100km
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Friday's schedule at the Etihad Airways Abu Dhabi Grand Prix
GP3 qualifying, 10:15am
Formula 2, practice 11:30am
Formula 1, first practice, 1pm
GP3 qualifying session, 3.10pm
Formula 1 second practice, 5pm
Formula 2 qualifying, 7pm
Essentials
The flights
Etihad and Emirates fly direct from the UAE to Delhi from about Dh950 return including taxes.
The hotels
Double rooms at Tijara Fort-Palace cost from 6,670 rupees (Dh377), including breakfast.
Doubles at Fort Bishangarh cost from 29,030 rupees (Dh1,641), including breakfast. Doubles at Narendra Bhawan cost from 15,360 rupees (Dh869). Doubles at Chanoud Garh cost from 19,840 rupees (Dh1,122), full board. Doubles at Fort Begu cost from 10,000 rupees (Dh565), including breakfast.
The tours
Amar Grover travelled with Wild Frontiers. A tailor-made, nine-day itinerary via New Delhi, with one night in Tijara and two nights in each of the remaining properties, including car/driver, costs from £1,445 (Dh6,968) per person.
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
Killing of Qassem Suleimani
