HSBC's announcement that it is in talks to sell its 51.6 per cent stake in Ping An Insurance - the mainland's second-largest insurance company by premiums - has set tongues wagging in the market.
Everyone knows that Ping An is HSBC's second-biggest investment on the mainland after Bank of Communications, in which it has a 19.9 per cent stake. It also has an 8 per cent stake in Bank of Shanghai. HSBC has been engaged in a major sell-off of its non-core assets since 2011 when chief executive Stuart Gulliver announced his intention of "streamlining" the bank's operations. The talk yesterday was more about the timing.
Readers will no doubt be aware of The New York Times' controversial story which included claims, which have been denied, that Premier Wen Jiabao's mother had a stake in Ping An which was worth US$120 million five years ago. The thinking among the more cynically inclined in the market is that with Wen due to step down shortly, now might be a good time to exit this investment.
Our Financial Secretary John Tsang Chun-wah was waxing lyrical about China and its economic growth at an Asia Society lunch recently. Having delivered his piece he left immediately and so did not hear the distinguished economics professor Jagdish Bhagwati, from Columbia University, speak. He declared that China's economic growth would decelerate and compared it unfavourably with India, which has all the elements of a democracy. It also has a free press, opposition parties, an independent judiciary and civil society, while growing political aspirations do not have an outlet in China.
However, we recall that Bhagwati's fellow countryman, Nobel prize-winning economist Amartya Sen, writing last year in The Hindu, pointed out that real living standards in India were way below China's. Data from international organisations, he wrote, show China in front in most areas. Life expectancy at birth in China was 73.5 years compared with 64.4 years in India; the infant mortality rate is 50 per thousand in India and just 17 in China, and the under-five mortality rate is 66 for Indians and 19 for the Chinese. China's adult literacy rate is 94 per cent, compared with India's 65 per cent, he said.