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WIC Template 1 Talking Point 6 Week in 60 Seconds 7 M&A Week in China 8 Auto Industry 9 Property 11 Healthcare 13 China Consumer 14 China and the World 20 June 2014 18 Society and Culture Issue 242 21 And Finally www.weekinchina.com 22 The Back Page The call of Thailand m o c . n i e t s p e a t i n e b . w w w As China Mobile seals Thai investment, many judge CP Group’s Dhanin Chearavanont the best-connected overseas businessman in China Brought to you by Week in China Talking Point 20 June 2014 Upwardly mobile Another China deal for Thailand’s influential CP Group All the tea in China: billionaire Dhanin Chearavanont pictured at a Sino-Thai business summit any businessmen lay claim venture in Shenzhen’s special eco - Being first brought advantages. Mto being the first to invest in nomic zone. By 1982 he would also “Because we were the only one in - China after it reopened its door to get the “No. 001” licences in Zhuhai vesting in the country, the govern - foreign investment in the late and Shantou too. ment gave us full support. They 1970s. Dhanin’s agribusiness grew wanted to make sure we were suc - But Thailand’s richest tycoon quickly , enjoying a virtual monop - cessful,” Dhanin told China Eco - Dhanin Chearavanont probably has oly at the time. (His local rival New nomic Weekly in an interview three one of the most convincing cases. Hope was a cash-strapped startup in years ago. The magazine had ranked In 1979 Dhanin’s Charoen Pokp - 1982.) By 2012, CP had built more the ethnic Chinese tycoon as hand, or CP Group, teamed up with than 100 feed mills in China, cover - China’s fourth most important P h o t o US-based Continental Grain Group ing all but two provinces. The Thai business leader, and top as a foreign S o u r c to produce animal feed in Shen - conglomerate today has 200,000 investor. e : I m a zhen. And Dhanin won “Foreign In - hectares dedicated to agribusiness, Since 2008, Dhanin has been g i n e C vestor Certificate No. 001” for making it the biggest foreign leaser chairman of the China Overseas h i n a setting up the first foreign joint of Chinese land. Chinese Entrepreneurs Association, 1 In the future, finance will help new growth flourish. There are grounds for cautious optimism in the real economy — but creating sustainable growth always needs careful encouragement. New income streams should be built on opportunities that have longevity and new solutions prepared for technology that will continue to evolve. In this era of transparency, HSBC is working with clients to help create conditions in which businesses can flourish. By connecting the developed and the developing world, we can help you protect and cultivate real growth — and so create that success that lasts. There’s more on the future of finance at www.hsbcnet.com/growth HSBC operates in various jurisdictions through its affiliates, including, but not limited to, HSBC Bank plc who is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, The Hongkong and Shanghai Banking Corporation Limited, HSBC Securities (USA) Inc., member of NYSE, FINRA and SIPC, and HSBC Bank USA, NA. Issued by HSBC Holdings plc. AC22067 Week in China Talking Point 20 June 2014 a Beijing-endorsed trade group that promotes foreign investment into China. He has also been busy work - ing his Chinese ties. Last week CP agreed to sell an 18% stake in its tele - com and broadcasting unit True Group to China Mobile for $880 million in the first foreign invest - ment in Thailand since the military coup last month. The investment by China’s lead - ing telecom carrier looks like a much-needed vote of confidence. Observers also say the deal could strengthen Beijing’s ties with one of the few countries in Southeast Asia with which it has no territo - rial disputes. Why does China Mobile want the True stake? Unlike some of its previous acquisi - Now pushing into Thailand tions, China Mobile hasn’t offered a reason why it is buying into the in 2009 ran into political resistance Daily, a pro-Beijing newspaper, con - Thai market. In a brief announce - in Taiwan when Taipei refused to curs. “It is puzzling to see China Mo - ment to shareholders, the telco said ease ownership curbs. Also in 2013, bile investing in a debt-laden only that it will be exploring “ex - China Mobile had to pull out of a telecom firm that only occupies the tensive and long-term cooperation” bid with Britain’s Vodafone for a third position in a mobile market with True. new licence in Myanmar. that is already 140% saturated,” it Going global has become a With a subscriber base of 29 mil - suggests. “Rather than underlining clichéd strategy for China’s state- lion, True is Thailand’s only fully in - the growth prospects of the telecom controlled giants. But China Mo - tegrated telecom firm. It is also the market in Thailand, the deal actu - bile hasn’t been deal-hungry, leading pay TV operator and runs ally reflects Dhanin Chearavanont’s despite sitting on more than $70 the country’s largest broadband powerful China connections.” billion in cash. In fact, it has com - network. pleted just two takeovers offshore. Even so, Forbes expects the deal How well-connected is he? The first was a buyout of China Re - to be of little consequence for China “It has never been a secret that sources Peoples, one of six mobile Mobile, especially in the short term, Dhanin Chearavanont has a long - telecom operators in Hong Kong, as it already enjoys the world’s standing and close relationship with in 2005. And back in 2007, it took biggest customer base of 785 mil - the Chinese government,” China over Pakistan’s PakTel for $460 lion subscribers. Economic Weekly claims. The mag - million. That firm was later re - “It is somewhat surprising that azine (run by the People’s Daily) branded as Zong and currently ac - China Mobile chose to invest at notes that CP has invested at least $6 counts for a little under a fifth of such a time,” the magazine writes, billion in China over the years and Pakistan’s 133 million mobile pointing to the political situation in that the conglomerate’s operations phone users. But the contribution Thailand. Separately a financial have spawned 213 units and employ from overseas revenues is so in - columnist at Hong Kong’s Apple more than 80,000 people. Besides significant (i.e. less than 5%) that Daily questions if the deal was the being one of the biggest animal feed China Mobile has never provided a result of a “pure commercial deci - producers, CP has pharmacies, su - P h o t o segmental breakdown. sion”, and whether it might even permarkets, a real estate portfolio S o u r There have been unsuccessful have been put together “against and a motorcycle business. Annual c e : R e forays too. For example, an attempt China Mobile’s own wishes”. China revenues are over Rmb50 bil - u t e r s to buy part of Far EasTone Telecom Even Hong Kong Commercial lion ($8 billion). 3 Week in China Talking Point 20 June 2014 Many Chinese grew familiar with CP – which goes by the Chinese Planet China name “Chia Tai” in the country – Strange but true stories from the new China after Chia Tai Hour was first aired on state broadcaster CCTV in 1989. The one-hour variety show is the ROAD KILL. A man in Shandong – who was driven crazy by his wife – came up with a gruesome scheme to leave her earlier this month. Police in only CCTV programme named after Rizhao City were called to a road accident where a body was found. It had a foreign firm. Still aired weekly, been battered into pieces by repeatedly being hit by passing vehicles. The Chia Tai Hour is also CCTV’s longest abandoned car was identified as belonging to a man named Li (the -running non-news programme. disenchanted husband). The police took what remained of the corpse and CP is able to ride on such privi - had it analysed in the lab. However, it turned out to be the remains of a dog, leges, says China Economic Weekly, not a human, reported Shandong TV. The next day it also became clear Li because Dhanin has won Beijing’s was still alive when he used his bank card to withdraw money from an trust, committing to China during automated teller machine in Jilin and was thereby picked up by police and “difficult times when foreign in - brought back to Rizhao. At this point he confessed that he’d tried to fake his vestors were fleeing or hesitating”. death by skinning the animal, dressing it in his own clothes and then leaving Dhanin demonstrated his re - it on the highway to be crushed by oncoming vehicles. He said he had done solve during his own most trou - so to escape his wife and run away with his lover. Law enforcement officials were unimpressed and Li is now due to be tried for ‘seriously endangering bled moment. As the 1998 road safety’. financial crisis engulfed Asia, CP sold its Lotus supermarket chain in Thailand to Britain’s Tesco. But that didn’t stop CP going ahead into Thailand. In doing so, he has ers visited China for talks on re - with the opening of the first Lotus pulled off a coup: reducing the gional security.
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