Losses & Profits. As a small grain of rice in the boot of a giant. China has all the attributes of a great economic power. What widely take advantage of the inconsistency of the us foreign policy to install a form of new global leadership. All attributes, except one : finance.
It is a small grain of rice, Xiaomi in chinese, which provides new light on this weakness and its consequences for the future of the country. The manufacturer of smartphones, the most famous of China, whose phenomenal success is built in less than ten years, wants to go public to find new capital needed for growth, particularly internationally. And not a little : the group aims to close $ 10-billion (€8.6 billion), the largest stock market transaction in the world since 2016. But life is never simple for a large chinese company and, as the game of go, the straight line is rarely the shortest path.
First obstacle, the chinese law prohibits, or restricts, the direct holding by a foreign person to a share in the capital of a chinese company. That’s not a problem, the ambitious entrepreneurs, as Lei Jun, founder of Xiaomi, has very quickly taken the road of tax havens. Like his comrades of the Internet, Alibaba and Tencent, he has registered his company in the Cayman islands. Then put the cap on the Exchange. Pretending to be a patriot, Xiaomi has constructed the scenario of a dual listing in hong Kong for the common shares and in Shanghai, certificates of deposit, supposed to replicate the behavior of the shares. A walk outside, on chinese soil, and one foot at home. The chinese authorities are pushing this solution, which allows citizens of the country to participate in the development of their champions.
But the solution has fizzled. Given the low investor appetite for this solution, the firm…