How Did Wal-Mart Crack Open China?
How so? The New York Times describes several such "princeling" arrangements, including the following:
Animation. DreamWorks' $330 animation studio joint venture with "Jiang Mianheng, the 61-year-old son of Jiang Zemin, the former Communist Party leader,"
Satellites. Asia's potentially "largest satellite communications operator" is run by Wen Yunsong, the son of Prime Minister Wen Jiabao,"
Security Scanners. A "state-controlled monopoly on security scanners used in China's airports, shipping ports and subway stations," was once managed by Hu Haifeng, son of President Hu Jintao,"
Power Generation. The chairwoman and chief executive of China Power International, a "big five power generating" company in China, is Li Xiaolin, daughter of former prime minister, Li Peng."
It's no secret that a major Wal-Mart expansion announced in 2005, sprang from a joint venture with a company known to have close ties to Chinese officials. And in 2009, the head of the company was forced to resign after a trading scandal.
Back in January 2005, Reuters reported that Wal-Mart had established a joint venture with Citic Pacific, a Hong Kong-based holding company with interests in "toll roads, power plants and stakes in Cathay Pacific Airways and rival Dragonair."Wal-Mart would be able to avoid spending money on real estate while opening "hundreds of stores" by 2012. Wal-Mart held 65% of the venture involving at least $250 million. Managing director, Henry Fan told Reuters, "We have a lot of property projects in China and we will welcome Wal-Mart as our anchor tenant." Citic Pacific's history reveals that it's just another princeling arrangement. Founded in 1990, Citic Pacific "presided over the property-to-steel conglomerate from a gleaming office tower overlooking Hong Kong's Victoria Harbour," according to Reuters. The Shanghai-born, Larry Yung, took control of the firm founded by his father, Rong Yiren, a vice president of China, between 1993 and 1998. As Reuters noted, Yung was "dubbed the red capitalist like his father the family enjoyed deep-rooted ties to China's Communist leaders fostered over half a century."
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