Some say that powerful people are the most likely to crave humiliation in, um, other arenas. This may apply to firms as well. Coca-Cola, for example, had its hand smacked away from acquiring Huiyuan, China’s top juice maker. This is the same company that effectively bought the Atlanta Olympics and treats the US Congress like a renter. But according to an unnamed source (please apply due skepticism), Coke is back, thanking Beijing and asking for another. The source says Coke is back in negotiations with Huiyuan, lured by Huiyuan’s vampishly lower share price, but for a minority stake this time. Hm. Maybe Coke executives crave a new experience: sitting on the sidelines of management decision-making, ignored. Certainly China must be pleased with yet another foreign investor (reference Mattel) coming back groveling for another round of discipline. Beijing is also looking at giving other multinationals a taste of the lash. For example, the NPC looks set to pass a new law on postal services. The draft law published last year looked to cut firms like FedEx and DHL out of the express letter part of the business – their bread and butter – reserving that privilege to China Post. It seems that their complaints were ignored (although what that means for sure is still unclear), and that the clause remains in the bill set to pass today.
But like any good dominatrix, China is also seductive. Beijing continues its flirtation with Taiwan, coyly offering improved access for Taiwan-based financial firms to enter the mainland market, along with tantalizing accessories like insurance, securities and currency exchange and clearance systems, in exchange for something to be discussed privately later.
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