The seed capital for China International Capital Corporation (CICC), which dominates domestic underwriting activity, was provided by Morgan Stanley back in 1995.
"The government wants to see these companies subjected to harsh market scrutiny, " says Lin Shoukang, head of capital markets for China International Capital Corp.
This puts them on course to add less than 7.5 trillion yuan to their loan books this year, according to Peng Wensheng of China International Capital Corporation.
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Such problems were familiar territory for China International Capital Corp.
Local governments will also borrow less and invest better than they did in the previous stimulus effort, argues Peng Wensheng of China International Capital Corporation, a Chinese investment bank.
Worries that investors may balk at a company with such baggage has forced underwriters Goldman Sachs Asia and China International Capital Corp. to scale down the size of the offering and cut the stock's asking price.
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According to Zhao Qingming, an economist at China Construction Bank, international capital will flow back to emerging nations such as China this year.
But as authors William Chandler and Holly Gwin explain in a recent study for the Carnegie Endowment for International Peace, China's capital markets are extremely small for a country its size.
Japan alone scored four airports in the top 20 (Tokyo Haneda, Central Japan, Tokyo Narita, and Kansai), China scored three ( Hong Kong International, Beijing Capital, and Shanghai Hongqiao).
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The stock sale, Goldman's sixth since 2009, completes the firm's exit from China's biggest lender ahead of new international capital rules that ratchet up the cost of holding stakes in other financial companies.
The changes are taking place over a broader effort to gradually loosen China's capital controls, a necessary move to give China's currency a greater international presence.
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Other hedge fund managers, like Stephen Mandel of Lone Pine Capital, remain focused on China for international investing.
For some months now, the big emerging markets of Brazil, Russia, India and China have been discussing providing more capital to the International Monetary Fund above their current quota in order to bail out Europe.
The International Olympic Committee visited China for a four-day inspection of the capital, Beijing, which is bidding to host the games in 2008.
That may be true, but in the meantime, it is providing yet another way in which international companies can fund their China expansions by accessing relatively inexpensive Chinese sources of capital.
Other competitors in the capital goods sector include: Caterpillar (CAT), China Yuchai International (CYD), and REGAL-BELOIT CORPORATION (RBC).
Hong Kong's capital, international links, and management and marketing know-how can complement China's technological and human resources to great mutual advantage.
China's securities regulator also is considering opening up the country's capital markets to international hedge funds by launching a feasibility study on broadening the scope of the QFII program to include such investors, a person familiar with the situation said last week.
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In China, I am personally aware of a Chinese company that is seeking capital from both local and international capital sources.
Even by the government's optimistic accounting, only Bank of China currently meets the standards set by the Bank for International Settlements, which thinks big banks should have capital equal to at least 8% of their assets.
In China the capital markets demand an extra 1, 316 basis points to compensate for the additional risk that international investors attribute to the lack of transparency and other governance issues.
It is hard to imagine an international financial measure which would be as potent a reminder to Beijing of China's dependency on Western capital to modernize its economy.
Investors in the share offering included CIC International, Boyu Capital and CITIC Capital, as well as CDB Capital, the equity investment arm of China Development Bank.
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