Listing victory for old capitalist
WHEN THE COMMUNISTS set up their new state in 1949, one of the first things they did was to nationalise the banks, taking control of one of the key instruments of power. But on November 27 of this year, the country's only private bank issued shares worth more than four billion yuan (about HK$3.7 billion), enabling it to increase its capital nearly four-fold. This followed a lengthy approval process and the issuance of a prospectus 213 pages long, the thickest in the history of the country's post-1949 stock market.
The listing of China Minsheng Bank, set up less than five years ago to provide money to private companies, is a landmark - a sign of how desperately the Communist Party needs the private sector to create wealth and jobs for the hundreds of thousands being laid off from state firms. It also suggests the economy is returning to its pre-1949 form.
On each day in the first half of this year, 429 private companies were set up on average, taking on 3,516 workers. The private sector accounts for about 20 per cent of China's industrial output and 40 per cent of its retail sales.
On December 8, representatives from more than 1,000 private companies met in the southwestern city of Kunming for the largest such gathering in the communist era. The biggest obstacle to the development of private companies has been access to credit, with government banks giving preference to state firms.
The listing is a personal triumph for Jing Shuping, 82, the bank's chairman and one of the most famous survivors of the pre-1949 capitalist class. He conceived the idea of the bank, persuaded suspicious politicians and regulators to approve it, and later won their permission for the listing.
Mr Jing is a living symbol of the pre-1949 business elite. He grew up with eight brothers and sisters in a large house in Shanghai. His father had interests in life assurance, oil and chemicals, and owned a factory that produced two brands of British cigarettes. After graduating in journalism from St John's University in Shanghai in 1939, Mr Jing went on to hold management posts and ran two of his father's cigarette companies.