Chapter 8 Chapter 07 Talking from Huiyuan: The True Face of Foreign Capital Acquisition of Chinese Enterprises
Imperialism is the highest stage of capitalism
It is no longer the competition between small enterprises and large enterprises, and enterprises with backward technology and enterprises with advanced technology.Already it is the monopoly that kills those businesses that do not submit to monopoly, the oppression and manipulation of monopoly. (Lenin: "Imperialism is the Highest Stage of Capitalism" People's Publishing House, April 2001, 3rd Edition, p. 19)
Huiyuan acquisition case, "anti-monopoly law" let Coca-Cola out.
Many experts and scholars are discussing whether we should use the "Anti-Monopoly Law" to block Coca-Cola's acquisition of Huiyuan.What is there to discuss?
The situation is unexpected, and the foreign capital behind Huiyuan is fierce.
The acquisition of Huiyuan Juice is already the end of a large number of foreign capital acquisitions of Chinese companies.
Confronting the Chinese market, what kind of rules can meet the challenges?
What happens if Wal-Mart defaults on its suppliers?
Zhu Xinli, the president of Huiyuan Juice, attended my class in 2003, when Huiyuan Juice was controlled by Delong.Delong is a company that I criticized in 2001. I have conducted a very detailed investigation and research on it - I named it "Delong Department".At that time, Delong controlled 51% of the shares of Huiyuan Juice.
In 2003, Zhu Xinli came to listen to my lecture, and I explained the entire strategic thinking of the Delong Department.He was very worried after hearing this, and negotiated with the Delong Department when he returned home.He accepted my suggestion and proposed that he either buy back 51% of Delong's shares, or sell his 49% shares to the Delong family.In short, he did not cooperate with Deron.Tang Wanxin, the leader of Delong at that time, also told him, don't listen to Lang Xianping, he is talking nonsense, we have no problem, I will promote you to vice chairman, and we will continue to cooperate.However, Zhu Xinli insisted on breaking up with Delong. In the end, it seemed that he paid tens of percent more to buy 51% of Delong's shares. Huiyuan Juice became Zhu Xinli's wholly-owned company.Well, this time he suddenly wants to sell 100% of his shares to Coca-Cola.
On September 3, 2008, Huiyuan Juice announced that Coca-Cola would acquire Huiyuan wholly-owned at a price of 12.2 Hong Kong dollars per share, totaling 17.92 billion Hong Kong dollars.This price is almost equivalent to three times the total assets of Huiyuan.As soon as the news came out, the stock price of Huiyuan Juice listed in Hong Kong immediately rushed from 4 Hong Kong dollars to more than 10 Hong Kong dollars.Whether Huiyuan Juice, a national brand, will die or not has aroused the attention of all parties in the society.Some experts pointed out sharply that this is foreign companies testing China's anti-monopoly with sky-high mergers and acquisitions.It is Zhu Xinli, the shrewd head of Huiyuan Juice, who advocates this acquisition.Prior to this, Zhu Xinli had never been defeated in the fight between Huiyuan and several competitors.What was he thinking this time, and what kind of game was behind Coca-Cola's acquisition of Huiyuan?
What did Coca-Cola do wrong?It's awesome.It shouldn't acquire 100% of Huiyuan's equity. If it is a little smarter, it will have no problem acquiring 80% of Huiyuan's equity or a joint venture. After two years, we will quietly kick Zhu Xinli away, and we will not feel it.But it was too eager for success, so it had to make a big move to acquire 100% of the equity in one go, but it was judged to have violated the "Anti-Monopoly Law", so it was cancelled.There are many controversies about this result, but I want to tell readers not to have any opinion on the "Anti-Monopoly Law" because of this incident, and not to criticize our government.Not only should we not object, in fact, we are not doing enough.Because Huiyuan Juice is already the end of a large number of foreign capital acquisitions of Chinese companies, in fact, we should pay attention to the issue of foreign capital acquisitions of Chinese companies from the very beginning.I have good evidence for this. When the news of Coca-Cola's acquisition of Huiyuan came out, domestic public opinion was in an uproar. Whether it was netizens or experts, there was almost an overwhelming condemnation.A number of companies are planning to jointly file a letter to the Ministry of Commerce to oppose the acquisition, on the grounds that after the merger of Coca-Cola and Huiyuan, they will monopolize more than half of the channels, and with Coca-Cola's financial support, there is basically no room for other companies to survive.At the same time, Coca-Cola was aggressively promoting public relations, while Zhu Xinli was determined. It didn't take long for many people to take this acquisition as a fact.After the acquisition of national brands such as Maxam, Vigor 28, Robust, Supor, Zhonghua Toothpaste, Nanfu Battery, Little Nurse, Dabao, etc., what reason does Huiyuan have to stand alone?However, this time Coca-Cola has encountered unprecedented troubles, it must pass the Ministry of Commerce's antitrust review. On March 18, 2009, the Ministry of Commerce stated that it rejected Coca-Cola's acquisition of Huiyuan, and the Huiyuan Juice case became the first merger and acquisition case rejected after the promulgation of China's "Anti-Monopoly Law".So, what exactly caused Coca-Cola to fail the review by the Ministry of Commerce?
According to the report of the Research and Development Center of the State Council, among the industries that have been opened up in China, the top five enterprises in each industry are foreign-funded enterprises. What does this mean?For example, in the glass industry, the five largest enterprises are all joint ventures; in the elevator industry, the five largest manufacturers accounting for more than 80% of the national output are all foreign-owned holdings; in the home appliance industry, 11 of the 18 national designated enterprises Cooperation with foreign capital; 20% of the pharmaceutical industry is in the hands of foreign capital.90% of auto sales in the domestic market come from foreign brands.What's even more frightening is that 21 of China's 28 major industries have most of their assets controlled by foreign capital, which means that foreign capital is the largest shareholder. Also, I believe that many readers like to drink Tsingtao beer. Do you really think that Tsingtao beer is a state-owned enterprise?That’s right, it’s still a state-owned enterprise at least when I’m talking about this topic. Qingdao State-owned Assets Supervision and Administration Commission holds 30% of the shares. The previous second largest shareholder was AB InBev with 27%. They just need to buy 4% more in the H-share market Shares, you can get control of Tsingtao Brewery.Now after changing hands several times, Asahi Brewery has become the second largest shareholder of Tsingtao Brewery.The state-owned brand in your mind will become a foreign-funded enterprise in a blink of an eye.In fact, if we use the "Anti-Monopoly Law", many companies should be blacklisted, but it is too late because they have all been acquired. On August 31, 2008, Zhu Xinli signed the acquisition agreement between Huiyuan Juice and Coca-Cola.On the first day of the month, the Anti-Monopoly Law of the People's Republic of China was officially promulgated.There seems to be a subtle relationship between Huiyuan Juice and the Anti-Monopoly Law.According to the person in charge of the National Development and Reform Commission, the reason for promulgating the "Anti-Monopoly Law" is because "with the rapid development of the reform and opening up in the past 30 years, the pattern of China's economy is also quietly changing, and there have been a number of industries in various fields that can influence the industry. There are not only large domestic enterprises, but also multinational corporations in these enterprises.” Then, how are these multinational corporations affecting our lives?
Not only that, 55% of China's import and export trade is foreign capital, of which 87% of high-tech exports are foreign capital.In addition, according to the data of the State Administration for Industry and Commerce, 80% of the tire industry is foreign-funded, 75% of the auto parts industry is foreign-funded, 80% of vehicle brands and 90% of sales are foreign-funded or joint ventures.~70% of the flat-panel TV industry is foreign-funded, and most of the profits of TVs come from flat-panel TVs, which is the most important source of profit.Foreign-funded joint venture pharmaceutical industry accounted for 27%, but in the high-end market, foreign capital accounted for 47% and 52% of the hospital and retail markets respectively.Among them, more than half of the top 10 antihypertensive drugs and about 70% of sales are foreign capital.Looking at the beer industry, how many breweries are there in China?There are breweries everywhere, only two brands have no foreign investment, and other brands you can imagine have foreign investment.The foreign-funded insurance industry has occupied 10% of the Chinese market within three years of its establishment.In Shanghai, foreign banks accounted for 17% of the market within three years of opening.95% of computer operating systems are foreign-owned, Intel's CPUs account for 85% of the market share, and Cisco accounts for 60% of the market share of enterprise wireless networks.20% of the express delivery industry is foreign capital.30% of the cement industry is foreign capital.30% of high-end hotels are foreign capital.Foreign capital also controls edible oil with little technological content, accounting for 85%.70% to 80% of high-end offset printing machines are foreign capital, 30% to 40% of loaders and half of construction machinery are foreign capital.These are nothing. We even raise pigs with foreign investment. Goldman Sachs, which has transformed itself, used to be an investment bank. It not only raises pigs, but also acquires the entire industry chain of pig raising, including distribution, warehousing, terminal retail, wholesale, and pig raising.Our farmers only raise pigs, but Goldman Sachs is superior. It not only produces pigs, but also has all the follow-up services. This is what foreign capital does.So I was angry when I saw many media reports. Many experts and scholars were discussing whether we should use the "Anti-Monopoly Law" to block Coca-Cola's acquisition of Huiyuan Juice.What is there to discuss?Look at the data, do we still need to discuss it?Let me tell you, we did it too late, not enough. Since the middle and late 1980s, my country has adopted incentive policies to increase the attractiveness of foreign capital.Many preferential conditions are given to foreign capital in taxation, finance, land and other aspects. After 1992, especially after China's accession to the WTO, foreign investment in China experienced two high growth rates.The huge Chinese market enables investors from all over the world to share the various benefits brought about by China's rapid economic development.From 1990 to 2004, foreign investors remitted US$250.6 billion in profits from China, about 70% of American companies made profits in China, and about 42% of companies' profit margins in China exceeded their global average profit margins.According to the estimate of the World Bank in 2008, due to the large amount of foreign capital introduced, nearly 40% of my country's total GDP was created by foreign-funded enterprises.Since foreign-funded enterprises have contributed a lot to China's economic development, why should we maintain a high degree of vigilance against these enterprises?
Since foreign-funded enterprises are so profitable, it is also beneficial for us to open factories in China. They not only hire our workers, but also increase consumption, so why should we reject foreign investment?The reason is simple. Let me give you an example. According to a research report published by the famous consulting firm McKinsey, in the next three to five years, 70% to 80% of China's retail market will be swept by foreign capital, including Wal-Mart, Carrefour, etc.Readers may feel that there is nothing wrong with it. Anyway, Carrefour is also good. The venue staff has a complete range of products and a good service attitude. Unlike our small stores, which do not have a complete range of products and are indifferent to customers.So foreign capital comes as soon as it wants, what's wrong with it?Is it that simple? Regarding this issue, I can’t explain clearly. Today I invited a farmer friend to give a lecture. This farmer is called a virtual farmer. I asked our farmer friend to tell me how to irrigate.Farmer friends said that irrigation is very simple, just open the sluice and start irrigation.But before irrigating, you have to dig a ditch, so that after the sluice is opened, the water will flow along the ditch to the farmland that needs water. This is called irrigation. What if you asked him stupidly, brother, what if you forgot to dig the ditch before you opened the floodgates?Then you must be scolded, are you a fool?He actually forgot to dig a ditch. Wouldn't the ground be flooded once the sluice was opened?Now let me tell you, why am I against it?There is only one reason, so many foreign capitals have entered China. Let me ask you, have we dug ditches?No, we didn't dig a trench. Carrefour and Wal-Mart in Shenzhen, the suppliers supply the goods, they don’t pay, they deduct everything, and they deduct all the fees.There are many such things.I still remember that a supplier in Shenzhen sold 380,000 yuan of rice to Carrefour. At the time of checkout, not only did he not get back the 380,000 yuan, but he owed 8,000 yuan.Why?Holiday fees, festival fees, channel fees, channel fees... all of this fee and that fee have been deducted for you, what can you do?Our supplier is so poor that he can only commit suicide by jumping off the building.Are you going to sue someone?Why do you go to court? If someone is rich and powerful, you can't win the lawsuit.where is the problem?It is because we have not dug ditches. If, as predicted by McKinsey, the foreign-funded retail industry sweeps China in three to five years, they will not compete with each other. Fighting each other is what the Chinese like to do, and foreigners will not be so stupid.When that day comes, once they occupy 80% of the Chinese market, they will jointly monopolize, then raise consumer prices, lower supply prices to exploit suppliers, and legally remit profits out of China.Why can they do this?Because we have not dug ditches, the biggest victims are our common people.This is the reason why I oppose foreign mergers and acquisitions.You may ask, what is a ditch?The ditches are the rules of the legalized game. Wal-Mart absolutely dare not withhold payment from suppliers in the United States, because the United States has dug ditches.For example, according to Chapter 11 of the U.S. Bankruptcy Code, as long as Wal-Mart owes three suppliers more than $5,000 in a row, any supplier can go to the U.S. federal bankruptcy court to declare Wal-Mart bankrupt.Instead of declaring bankruptcy, not jumping off a building, but declaring Wal-Mart bankrupt.Therefore, Wal-Mart dare not owe money at all in the United States, and must pay on time within three months. Isn't foreign capital scary?Foreign capital is not terrible, what is terrible is that we have not dug ditches.I have read a lot of media reports recently, but I don't even understand the basic spirit of the law.What did you say that the Coca-Cola incident was not judged article by article according to the law? Fuck you, is there any in the United States?America doesn't even have laws.American law belongs to the Anglo-American legal system, and there are no laws. , Why do they decide the case?by feeling.Our Haier wants to buy Mattel, but they didn’t even tell you the bill, so they just don’t allow it, so stop talking, go back, and let others buy it.If CNOOC wants to acquire the Unocal oil field in the United States, there is no need for anyone to judge you, and Congress will not allow it.what can you doHave we been so tyrannical?never.We are opening the door to invite you to come in and buy, and you go out to buy the United States and see what happens.You can't even go to the court, the administrative order is not allowed, and there is no need to use the "Anti-Monopoly Law" to sanction you. In the United States, a large-scale mass movement against trusts broke out in the 1880s.The anti-monopoly trend of thought led to the birth of the "Sherman Act" in 1890, which is known as the source of anti-monopoly laws around the world.Afterwards, the United States promulgated the "Clayton Act" and the "Federal Trade Commission Act." Based on these three laws, a number of separate laws and a large number of precedents, they constitute the anti-monopoly "ditch" in the United States today.Today, all member countries of the Organization for Economic Co-operation and Development, or OECD, have an Antitrust Act.Unlike developed countries, developing countries were generally not interested in the Anti-monopoly Law in the early 1980s, because governments were eager to develop their economies quickly and often adopted measures that harmed competition.Since the late 1980s, developing countries have begun to realize the importance of establishing a legal system to maintain free competition.The ditch, that is, the consciousness of rules has finally awakened.So how exactly do ditches work?
I am completely opposed to the views of many of our media, including foreign media. I want to give our government a shot in the arm through this book. We have not done enough.Next time we will judge the case based on our feelings. The next time you buy any of our companies, we will also ask our National People’s Congress, just one sentence-no, there is no reason, just not happy.The ultimate purpose of doing this is to protect the enterprises of our country, because these enterprises are really poor. There is an electrical appliance manufacturing company in Zhejiang called Chint. Schneider of Germany wants to acquire it. If it is in the United States, it would not let it be acquired. But in China, Schneider wants to acquire Chint, and Chint is unwilling to be acquired. You know What did Schneider do?Sue everywhere, sue in Beijing, sue in the United States, sue in Europe, sue Chint for counterfeiting.As a result, Chint spent 40% of its operating time going to court to file a lawsuit and prepare various materials to deal with Schneider.They adopt this strategy, hiring a huge team of lawyers, the most powerful lawyers to fight against you everywhere, and when they annoy you, maybe you will be sold.But the good news is that Chint's Nan Cunhui finally held up and won the lawsuit.But another equally well-known electrical company, Delixi, was sold to foreign capital at a price of 1.9 billion yuan.Why are foreign capitals so aggressive in China?Because we didn't dig ditches. Enterprises in developing countries have gradually become aware of the legal system and rules in the process of growth and globalization. However, it is not easy for these toddler enterprises to fully grasp the rules, because the multinational enterprises standing opposite them are different from their economic situation. are not equal.Under the protection of big capital, competition and cooperation with multinational companies is like a dangerous game. In the process of exploring the rules, murderous intentions are often hidden behind the rules, and the unspeakable game is thrilling.So how does this game work?
I have been promoting the legalization of the government on various occasions, just to prevent this phenomenon from happening.In fact, our government has been promoting legalization in recent years. For example, this time it promoted the implementation of the "Anti-Monopoly Law" and canceled the acquisition of Coca-Cola for the first time. You can see how much pressure it has received.Why is there stress?Because our academia hasn't figured out the situation yet.If you can explain it as thoroughly as I do, everyone will understand.Why should we protect our domestic businesses?It's not that we don't like internationalization, and it's not that we don't welcome acquisitions by foreign companies, but because the current acquisitions are unfair acquisitions. What is an unfair acquisition?For example, Germany's Bosch acquired Weifu in Wuxi. In fact, many similar acquisitions, including Coca-Cola's acquisition of Huiyuan, have a certain pattern.what kind of pattern?At the beginning, the foreign party paid the money, and the Chinese party took half of the factory house, land approval documents, and half of the equity.Do you think this is fair?If you think it is fair, you will underestimate foreigners. You should pay attention to that our Chinese factories are purely manufacturing. Companies like Bosch and Coca-Cola, when they acquire domestic companies, use manufacturing companies to buy our manufacturing companies, but they It also controls all other links, including the entire chain of raw material procurement, warehousing and transportation, wholesale and retail.Therefore, after the acquisition is completed, a joint venture with 50% of each party is established, and they will transfer all the profits from the acquired manufacturing link to the sales link through the price transfer payment system, such as warehousing, logistics, wholesale, retail, etc. links.Although the figures and profits are the same for the company's overall financial statements, but for the split enterprises, all the profits of the joint venture part of the manufacturing process have been transferred to the non-joint venture part, resulting in a loss for the joint venture part .Losing money for three years in a row, and then both sides injected capital, and the foreign capital injected 2 billion U.S. dollars. The Chinese side has no money, so what should I do?The Chinese party's equity was diluted, and 50% of the equity was diluted to 2%.They are using this method to eat up Chinese capital step by step. This is the current common method used by foreign-funded enterprises to acquire the domestic food industry. It seems fair at the beginning, and finally kicks the Chinese side away through some financial tricks, and they can do whatever they want.All this is because we lack legalized rules of the game and lack of channels. Therefore, regarding the "Anti-Monopoly Law", my point of view is exactly the same as that of other scholars. This is the first step for China to enter the ditch of legalized game rules.I don't think we've done enough or enough. We should have more laws like this. I don't even object to judging cases based on feelings. The United States can do it, and so can we.
What did Coca-Cola do wrong?It's awesome.It shouldn't acquire 100% of Huiyuan's equity. If it is a little smarter, it will have no problem acquiring 80% of Huiyuan's equity or a joint venture. After two years, we will quietly kick Zhu Xinli away, and we will not feel it.But it was too eager for success, so it had to make a big move to acquire 100% of the equity in one go, but it was judged to have violated the "Anti-Monopoly Law", so it was cancelled.There are many controversies about this result, but I want to tell readers not to have any opinion on the "Anti-Monopoly Law" because of this incident, and not to criticize our government.Not only should we not object, in fact, we are not doing enough.Because Huiyuan Juice is already the end of a large number of foreign capital acquisitions of Chinese companies, in fact, we should pay attention to the issue of foreign capital acquisitions of Chinese companies from the very beginning.I have good evidence for this. When the news of Coca-Cola's acquisition of Huiyuan came out, domestic public opinion was in an uproar. Whether it was netizens or experts, there was almost an overwhelming condemnation.A number of companies are planning to jointly file a letter to the Ministry of Commerce to oppose the acquisition, on the grounds that after the merger of Coca-Cola and Huiyuan, they will monopolize more than half of the channels, and with Coca-Cola's financial support, there is basically no room for other companies to survive.At the same time, Coca-Cola was aggressively promoting public relations, while Zhu Xinli was determined. It didn't take long for many people to take this acquisition as a fact.After the acquisition of national brands such as Maxam, Vigor 28, Robust, Supor, Zhonghua Toothpaste, Nanfu Battery, Little Nurse, Dabao, etc., what reason does Huiyuan have to stand alone?However, this time Coca-Cola has encountered unprecedented troubles, it must pass the Ministry of Commerce's antitrust review. On March 18, 2009, the Ministry of Commerce stated that it rejected Coca-Cola's acquisition of Huiyuan, and the Huiyuan Juice case became the first merger and acquisition case rejected after the promulgation of China's "Anti-Monopoly Law".So, what exactly caused Coca-Cola to fail the review by the Ministry of Commerce?
According to the report of the Research and Development Center of the State Council, among the industries that have been opened up in China, the top five enterprises in each industry are foreign-funded enterprises. What does this mean?For example, in the glass industry, the five largest enterprises are all joint ventures; in the elevator industry, the five largest manufacturers accounting for more than 80% of the national output are all foreign-owned holdings; in the home appliance industry, 11 of the 18 national designated enterprises Cooperation with foreign capital; 20% of the pharmaceutical industry is in the hands of foreign capital.90% of auto sales in the domestic market come from foreign brands.What's even more frightening is that 21 of China's 28 major industries have most of their assets controlled by foreign capital, which means that foreign capital is the largest shareholder. Also, I believe that many readers like to drink Tsingtao beer. Do you really think that Tsingtao beer is a state-owned enterprise?That’s right, it’s still a state-owned enterprise at least when I’m talking about this topic. Qingdao State-owned Assets Supervision and Administration Commission holds 30% of the shares. The previous second largest shareholder was AB InBev with 27%. They just need to buy 4% more in the H-share market Shares, you can get control of Tsingtao Brewery.Now after changing hands several times, Asahi Brewery has become the second largest shareholder of Tsingtao Brewery.The state-owned brand in your mind will become a foreign-funded enterprise in a blink of an eye.In fact, if we use the "Anti-Monopoly Law", many companies should be blacklisted, but it is too late because they have all been acquired. On August 31, 2008, Zhu Xinli signed the acquisition agreement between Huiyuan Juice and Coca-Cola.On the first day of the month, the Anti-Monopoly Law of the People's Republic of China was officially promulgated.There seems to be a subtle relationship between Huiyuan Juice and the Anti-Monopoly Law.According to the person in charge of the National Development and Reform Commission, the reason for promulgating the "Anti-Monopoly Law" is because "with the rapid development of the reform and opening up in the past 30 years, the pattern of China's economy is also quietly changing, and there have been a number of industries in various fields that can influence the industry. There are not only large domestic enterprises, but also multinational corporations in these enterprises.” Then, how are these multinational corporations affecting our lives?
Not only that, 55% of China's import and export trade is foreign capital, of which 87% of high-tech exports are foreign capital.In addition, according to the data of the State Administration for Industry and Commerce, 80% of the tire industry is foreign-funded, 75% of the auto parts industry is foreign-funded, 80% of vehicle brands and 90% of sales are foreign-funded or joint ventures.~70% of the flat-panel TV industry is foreign-funded, and most of the profits of TVs come from flat-panel TVs, which is the most important source of profit.Foreign-funded joint venture pharmaceutical industry accounted for 27%, but in the high-end market, foreign capital accounted for 47% and 52% of the hospital and retail markets respectively.Among them, more than half of the top 10 antihypertensive drugs and about 70% of sales are foreign capital.Looking at the beer industry, how many breweries are there in China?There are breweries everywhere, only two brands have no foreign investment, and other brands you can imagine have foreign investment.The foreign-funded insurance industry has occupied 10% of the Chinese market within three years of its establishment.In Shanghai, foreign banks accounted for 17% of the market within three years of opening.95% of computer operating systems are foreign-owned, Intel's CPUs account for 85% of the market share, and Cisco accounts for 60% of the market share of enterprise wireless networks.20% of the express delivery industry is foreign capital.30% of the cement industry is foreign capital.30% of high-end hotels are foreign capital.Foreign capital also controls edible oil with little technological content, accounting for 85%.70% to 80% of high-end offset printing machines are foreign capital, 30% to 40% of loaders and half of construction machinery are foreign capital.These are nothing. We even raise pigs with foreign investment. Goldman Sachs, which has transformed itself, used to be an investment bank. It not only raises pigs, but also acquires the entire industry chain of pig raising, including distribution, warehousing, terminal retail, wholesale, and pig raising.Our farmers only raise pigs, but Goldman Sachs is superior. It not only produces pigs, but also has all the follow-up services. This is what foreign capital does.So I was angry when I saw many media reports. Many experts and scholars were discussing whether we should use the "Anti-Monopoly Law" to block Coca-Cola's acquisition of Huiyuan Juice.What is there to discuss?Look at the data, do we still need to discuss it?Let me tell you, we did it too late, not enough. Since the middle and late 1980s, my country has adopted incentive policies to increase the attractiveness of foreign capital.Many preferential conditions are given to foreign capital in taxation, finance, land and other aspects. After 1992, especially after China's accession to the WTO, foreign investment in China experienced two high growth rates.The huge Chinese market enables investors from all over the world to share the various benefits brought about by China's rapid economic development.From 1990 to 2004, foreign investors remitted US$250.6 billion in profits from China, about 70% of American companies made profits in China, and about 42% of companies' profit margins in China exceeded their global average profit margins.According to the estimate of the World Bank in 2008, due to the large amount of foreign capital introduced, nearly 40% of my country's total GDP was created by foreign-funded enterprises.Since foreign-funded enterprises have contributed a lot to China's economic development, why should we maintain a high degree of vigilance against these enterprises?
Since foreign-funded enterprises are so profitable, it is also beneficial for us to open factories in China. They not only hire our workers, but also increase consumption, so why should we reject foreign investment?The reason is simple. Let me give you an example. According to a research report published by the famous consulting firm McKinsey, in the next three to five years, 70% to 80% of China's retail market will be swept by foreign capital, including Wal-Mart, Carrefour, etc.Readers may feel that there is nothing wrong with it. Anyway, Carrefour is also good. The venue staff has a complete range of products and a good service attitude. Unlike our small stores, which do not have a complete range of products and are indifferent to customers.So foreign capital comes as soon as it wants, what's wrong with it?Is it that simple? Regarding this issue, I can’t explain clearly. Today I invited a farmer friend to give a lecture. This farmer is called a virtual farmer. I asked our farmer friend to tell me how to irrigate.Farmer friends said that irrigation is very simple, just open the sluice and start irrigation.But before irrigating, you have to dig a ditch, so that after the sluice is opened, the water will flow along the ditch to the farmland that needs water. This is called irrigation. What if you asked him stupidly, brother, what if you forgot to dig the ditch before you opened the floodgates?Then you must be scolded, are you a fool?He actually forgot to dig a ditch. Wouldn't the ground be flooded once the sluice was opened?Now let me tell you, why am I against it?There is only one reason, so many foreign capitals have entered China. Let me ask you, have we dug ditches?No, we didn't dig a trench. Carrefour and Wal-Mart in Shenzhen, the suppliers supply the goods, they don’t pay, they deduct everything, and they deduct all the fees.There are many such things.I still remember that a supplier in Shenzhen sold 380,000 yuan of rice to Carrefour. At the time of checkout, not only did he not get back the 380,000 yuan, but he owed 8,000 yuan.Why?Holiday fees, festival fees, channel fees, channel fees... all of this fee and that fee have been deducted for you, what can you do?Our supplier is so poor that he can only commit suicide by jumping off the building.Are you going to sue someone?Why do you go to court? If someone is rich and powerful, you can't win the lawsuit.where is the problem?It is because we have not dug ditches. If, as predicted by McKinsey, the foreign-funded retail industry sweeps China in three to five years, they will not compete with each other. Fighting each other is what the Chinese like to do, and foreigners will not be so stupid.When that day comes, once they occupy 80% of the Chinese market, they will jointly monopolize, then raise consumer prices, lower supply prices to exploit suppliers, and legally remit profits out of China.Why can they do this?Because we have not dug ditches, the biggest victims are our common people.This is the reason why I oppose foreign mergers and acquisitions.You may ask, what is a ditch?The ditches are the rules of the legalized game. Wal-Mart absolutely dare not withhold payment from suppliers in the United States, because the United States has dug ditches.For example, according to Chapter 11 of the U.S. Bankruptcy Code, as long as Wal-Mart owes three suppliers more than $5,000 in a row, any supplier can go to the U.S. federal bankruptcy court to declare Wal-Mart bankrupt.Instead of declaring bankruptcy, not jumping off a building, but declaring Wal-Mart bankrupt.Therefore, Wal-Mart dare not owe money at all in the United States, and must pay on time within three months. Isn't foreign capital scary?Foreign capital is not terrible, what is terrible is that we have not dug ditches.I have read a lot of media reports recently, but I don't even understand the basic spirit of the law.What did you say that the Coca-Cola incident was not judged article by article according to the law? Fuck you, is there any in the United States?America doesn't even have laws.American law belongs to the Anglo-American legal system, and there are no laws. , Why do they decide the case?by feeling.Our Haier wants to buy Mattel, but they didn’t even tell you the bill, so they just don’t allow it, so stop talking, go back, and let others buy it.If CNOOC wants to acquire the Unocal oil field in the United States, there is no need for anyone to judge you, and Congress will not allow it.what can you doHave we been so tyrannical?never.We are opening the door to invite you to come in and buy, and you go out to buy the United States and see what happens.You can't even go to the court, the administrative order is not allowed, and there is no need to use the "Anti-Monopoly Law" to sanction you. In the United States, a large-scale mass movement against trusts broke out in the 1880s.The anti-monopoly trend of thought led to the birth of the "Sherman Act" in 1890, which is known as the source of anti-monopoly laws around the world.Afterwards, the United States promulgated the "Clayton Act" and the "Federal Trade Commission Act." Based on these three laws, a number of separate laws and a large number of precedents, they constitute the anti-monopoly "ditch" in the United States today.Today, all member countries of the Organization for Economic Co-operation and Development, or OECD, have an Antitrust Act.Unlike developed countries, developing countries were generally not interested in the Anti-monopoly Law in the early 1980s, because governments were eager to develop their economies quickly and often adopted measures that harmed competition.Since the late 1980s, developing countries have begun to realize the importance of establishing a legal system to maintain free competition.The ditch, that is, the consciousness of rules has finally awakened.So how exactly do ditches work?
I am completely opposed to the views of many of our media, including foreign media. I want to give our government a shot in the arm through this book. We have not done enough.Next time we will judge the case based on our feelings. The next time you buy any of our companies, we will also ask our National People’s Congress, just one sentence-no, there is no reason, just not happy.The ultimate purpose of doing this is to protect the enterprises of our country, because these enterprises are really poor. There is an electrical appliance manufacturing company in Zhejiang called Chint. Schneider of Germany wants to acquire it. If it is in the United States, it would not let it be acquired. But in China, Schneider wants to acquire Chint, and Chint is unwilling to be acquired. You know What did Schneider do?Sue everywhere, sue in Beijing, sue in the United States, sue in Europe, sue Chint for counterfeiting.As a result, Chint spent 40% of its operating time going to court to file a lawsuit and prepare various materials to deal with Schneider.They adopt this strategy, hiring a huge team of lawyers, the most powerful lawyers to fight against you everywhere, and when they annoy you, maybe you will be sold.But the good news is that Chint's Nan Cunhui finally held up and won the lawsuit.But another equally well-known electrical company, Delixi, was sold to foreign capital at a price of 1.9 billion yuan.Why are foreign capitals so aggressive in China?Because we didn't dig ditches. Enterprises in developing countries have gradually become aware of the legal system and rules in the process of growth and globalization. However, it is not easy for these toddler enterprises to fully grasp the rules, because the multinational enterprises standing opposite them are different from their economic situation. are not equal.Under the protection of big capital, competition and cooperation with multinational companies is like a dangerous game. In the process of exploring the rules, murderous intentions are often hidden behind the rules, and the unspeakable game is thrilling.So how does this game work?
I have been promoting the legalization of the government on various occasions, just to prevent this phenomenon from happening.In fact, our government has been promoting legalization in recent years. For example, this time it promoted the implementation of the "Anti-Monopoly Law" and canceled the acquisition of Coca-Cola for the first time. You can see how much pressure it has received.Why is there stress?Because our academia hasn't figured out the situation yet.If you can explain it as thoroughly as I do, everyone will understand.Why should we protect our domestic businesses?It's not that we don't like internationalization, and it's not that we don't welcome acquisitions by foreign companies, but because the current acquisitions are unfair acquisitions. What is an unfair acquisition?For example, Germany's Bosch acquired Weifu in Wuxi. In fact, many similar acquisitions, including Coca-Cola's acquisition of Huiyuan, have a certain pattern.what kind of pattern?At the beginning, the foreign party paid the money, and the Chinese party took half of the factory house, land approval documents, and half of the equity.Do you think this is fair?If you think it is fair, you will underestimate foreigners. You should pay attention to that our Chinese factories are purely manufacturing. Companies like Bosch and Coca-Cola, when they acquire domestic companies, use manufacturing companies to buy our manufacturing companies, but they It also controls all other links, including the entire chain of raw material procurement, warehousing and transportation, wholesale and retail.Therefore, after the acquisition is completed, a joint venture with 50% of each party is established, and they will transfer all the profits from the acquired manufacturing link to the sales link through the price transfer payment system, such as warehousing, logistics, wholesale, retail, etc. links.Although the figures and profits are the same for the company's overall financial statements, but for the split enterprises, all the profits of the joint venture part of the manufacturing process have been transferred to the non-joint venture part, resulting in a loss for the joint venture part .Losing money for three years in a row, and then both sides injected capital, and the foreign capital injected 2 billion U.S. dollars. The Chinese side has no money, so what should I do?The Chinese party's equity was diluted, and 50% of the equity was diluted to 2%.They are using this method to eat up Chinese capital step by step. This is the current common method used by foreign-funded enterprises to acquire the domestic food industry. It seems fair at the beginning, and finally kicks the Chinese side away through some financial tricks, and they can do whatever they want.All this is because we lack legalized rules of the game and lack of channels. Therefore, regarding the "Anti-Monopoly Law", my point of view is exactly the same as that of other scholars. This is the first step for China to enter the ditch of legalized game rules.I don't think we've done enough or enough. We should have more laws like this. I don't even object to judging cases based on feelings. The United States can do it, and so can we.