Every week, dear readers, there seems to be someone we need to feel sorry for in the endless and fascinating soap opera that is China. Today we are commiserating for whoever it was that was hoping to use Anbang Insurance’s bid for Starwood to get US$14 billion out of the country. It was an acquisition that made no sense in any context other than capital flight, and as we head towards the weekend, the news has popped up that Anbang’s bid has been withdrawn, causing holiday heartache for not only the aforementioned individuals or groups – who knows, it might even have been Anbang! – but also for the ranks of lawyers and auditing people who would have been able to suck in monstrous fees from such a deal. Starwood is the sort of brand that appeared to make M&A sense in terms of global reach, thereby apparently stilling any regulatory objections at least on this side of the Pacific, even if the deal made no sense in other ways. We are confident, however, that other routes and channels will be found, as history shows clearly that cash has a way of having its way.
Speaking of cash, this week has also seen robust efforts by the national team to get the Shanghai stock index out of the gloomy 2,000s and into the more optimistic 3,000s. We would not be so foolhardy as to actually invest in China stocks, being strongly averse to gambling situations that are fixed. But as a barometer of China today, a pulse of how society and the machine as a whole is feeling, there is really nothing so transparent and immediate as the Shanghai stock index. It was a tough week here too. The index nudged its way over the 3000 line a couple of times, thanks to Buddha-alone-knows how much money spent. And with the Qingming festival coming up, they really wanted a 3 to end the week. And whaddya know? They got it!
And also speaking of Qingming, it is worth noting that this is the 40th anniversary of events which foreshadowed certain changes. We remember in the early 1980s when the verdict on that one was reversed. Happy Qingming!