Highlights from the last week of China business news.
Democracy, but only within the party
While we wait breathlessly for the new leadership lineup next Monday, at the close of the twice-a-decade Party Congress, we’ll just have to content ourselves with these morsels about the CPC’s burgeoning "intraparty democracy." Say what? President (and party boss) Hu Jintao said in his key speech to the Congress that the party is working to "expand intraparty democracy to develop the people’s democracy." Xinhua noted that Hu uttered "democracy" more than 60 times during that speech (which, by some accounts, was a 2.5-hour test of attendees’ stamina). Then, the party’s HR chief, who vets promotions and appointments, said "Democracy within the party is the lifeline of the party," but also added, "Likewise, unity is also the lifeline of the party." Huh? The markets, meanwhile, paid no attention to this game of ideological tongue-twisters. The Shanghai Composite broke through the 6,000-point ceiling on October 16, setting a new record. Making money trumps politics, for now, it seems.
High-tech picks up speed
Just as talk of a second internet bubble in the US starts to gain traction (don’t believe it? This great New York Times article will convince you), Alibaba, right on cue, pops up with its IPO. Jack Ma, Alibaba’s pugnacious boss, has made plans to raise US$1.33 billion on the Hong Kong Stock Exchange, which would make it China’s biggest tech IPO to date. If all goes to plan, Alibaba will receive a net profit of more than US$80 million. Ma has already bested foreign pretenders like eBay, who dared encroach on his turf (Alibaba’s auction site Taobao dominated eBay in the local e-auction market). Now, pockets lined with cash, it looks like he’s ready to start the next phase of Alibaba’s rise and rise. Another smart Chinese player, telecom firm Huawei, is also making its mark felt abroad. Last week it announced a plan to buy 21.5% of 3Com, the US network equipment manufacturer. The folks at the Shenzhen Stock Exchange must have been paying attention – Huawei, after all, is still a privately held company, although it’s already a global telecoms equipment player. The exchange will launch a new growth enterprise board targeting high-tech companies, part of a national plan to accelerate the country’s tech sector, which also includes a US$10.7 billion investment from China Development Bank.
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