Asian Investment

[Stratman Wolves]

I'm very curious to hear you thoughts on this. We've all heard how Chinese officials are "encouraging" investment abroad, but in another thread, someone mentioned how Villa, Blues, and Baggies are all Hong Kong-owned, while FOSUN is the only one of the Midlands clubs that are directly Chinese owned, and this is part of the reason Wolves seem to have had so much more investment, with a clear objective. What do you all make of this? Did Wolves luck out in that the other clubs (Mad Doctor Tony Xia aside) seem more cautious, if not hesitant to invest? What is the Baggies' Chinese owners ambitions anyways? The whole situation is very interesting.

 

[Wolfheart]

Their wealth isn’t comparable and because of that, it pretty much shows the business acumen of FOSUN is significantly better by their turnover.

Our chairman’s wealth has gone up $4 billion dollars since he brought us let alone Fosuns profits as a whole.

You add that to the fact the red tape has been lifted on international investment by Chinese government recently and a pro outward investment financial adviser in government has taken helm FOSUN will become one of the largest private companies in the world.

We got lucky. But then again, we were also more attractive proposal. Something we can actually thank Morgan for.

 

[HKWolf]

It was me who mentioned their owners being from Hong Kong. I wasn’t strictly correct as Mad Dr is from Shanghai and the Florist is from Guangzhou, however their business interests do lie in Hong Kong. Blues owners are from The Kong.

Fosun on the other hand whilst having some aspects listed on the Hong Kong stock exchange are still overall a Chinese company. Their headquarters are in Shanghai and many of their business’ are Chinese companies. Parts of Fosun are also on the Shanghai stock exchange.

Fosun also have political ties, have joint ventures with the Chinese government and are a big player in China. Comparing Fosun to the other club owners is like comparing Virgin with its Airline, Bank, TV and Mobile phone company etc to someone who just won the lottery.

 

[WW1963]

Albion's owner has no money. His entire wealth was ploughed into buying them in the hope of them staying in the Premiership - with minimal investment - for at least three years.

What he's done is:

1) £150m to buy the club.

2) £30m investment per season.

3) £50m wages per season.

4) Start reaping the rewards in year three due to the £150m guaranteed each season for being in the top flight.

What Peace didn't tell him is that they have the oldest squad of hoofers in the whole of UK footbal and as a consequence they are a sinking ship that will go down within two seasons.

Unless they change managers, ten players, the whole ethos at the club - whilst in the Premiership.

The Chinese gardener was sold a pup.

 

[BlahBlah]

I'm very curious to hear you thoughts on this. We've all heard how Chinese officials are "encouraging" investment abroad, but in another thread, someone mentioned how Villa, Blues, and Baggies are all Hong Kong-owned, while FOSUN is the only one of the Midlands clubs that are directly Chinese owned, and this is part of the reason Wolves seem to have had so much more investment, with a clear objective. What do you all make of this? Did Wolves luck out in that the other clubs (Mad Doctor Tony Xia aside) seem more cautious, if not hesitant to invest? What is the Baggies' Chinese owners ambitions anyways? The whole situation is very interesting.

There have been instances of Chinese companies borrowing investment money from Chinese banks, which ultimately leads back to the Chinese Govt. that owns all Chinese banks.
So where you have a private Chinese company, they are all in effect, linked to the Government for finance because China carries the can.
Some of these companies (like Dalian, a massive Fosun-sized company) expanded very fast, made dodgy high-risk investments, had poor business plans, lost money to their detriment and the embarrassment of China.
Hence the bosses being called in to explain themselves, and the new directives encouraging investment in more sustainable businesses that carry less risk, and banning new investment in "vanity projects".
Fosun could have been included in this because holiday companies, football clubs and circus acts might be looked at unfavourably.
Football is a high-risk investment. As we know, it can drain money like water running out of a bath.

Where Fosun are slightly different is that they have diversified investment overseas and they own profitable assets in dollars across multiple areas, so they're not gambling all their money on one portfolio, and they're not operating solely in a Chinese bubble only backed by China and affecting the Chinese. They also have obligations to produce accounts for foreign countries, which exposes them to external scrutiny far more than say, that clown Carson Yeung who destroyed Birmingham City with his ghost company, and who is still languishing in jail.

Wolves at the moment are just a pinprick and hardly worth mentioning in their accounts, but you would expect that if they continued to invest in Wolves it would be to expand the business and link it to other activities such as infrastructure, jobs, long-term income streams....not just splashing cash on transfer fees that could have a very quick write off if things go wrong. They're being encouraged to run as a business and not get greedy.

 

[Stratman Wolves]

It was me who mentioned their owners being from Hong Kong. I wasn’t strictly correct as Mad Dr is from Shanghai and the Florist is from Guangzhou, however their business interests do lie in Hong Kong. Blues owners are from The Kong.

Fosun on the other hand whilst having some aspects listed on the Hong Kong stock exchange are still overall a Chinese company. Their headquarters are in Shanghai and many of their business’ are Chinese companies. Parts of Fosun are also on the Shanghai stock exchange.

Fosun also have political ties, have joint ventures with the Chinese government and are a big player in China. Comparing Fosun to the other club owners is like comparing Virgin with its Airline, Bank, TV and Mobile phone company etc to someone who just won the lottery.

So is it safe to assume that FOSUN's investment as a whole depends on Xi Jinping's mood and control, or is there some flexibility? I remember reading Guo Guanchang did disappear a couple years ago for "a few days" while "assisting" in an investigation.

 

[ShropshireLad]

I'm very curious to hear you thoughts on this. We've all heard how Chinese officials are "encouraging" investment abroad, but in another thread, someone mentioned how Villa, Blues, and Baggies are all Hong Kong-owned, while FOSUN is the only one of the Midlands clubs that are directly Chinese owned, and this is part of the reason Wolves seem to have had so much more investment, with a clear objective. What do you all make of this? Did Wolves luck out in that the other clubs (Mad Doctor Tony Xia aside) seem more cautious, if not hesitant to invest? What is the Baggies' Chinese owners ambitions anyways? The whole situation is very interesting.

Hong Kong is in China. Fosun are based in Shanghai which is also in China.

 

[Stratman Wolves]

Hong Kong is in China. Fosun are based in Shanghai which is also in China.

Hong Kong is a special administrative region.

 

[ShropshireLad]

Hong Kong is a special administrative region.

Aye but it's officially in China again and there's nowt we can do about it.

 

[HKWolf]

Hong Kong is in China. Fosun are based in Shanghai which is also in China.

Hong Kong right now is not the same as any normal Chinese city. In 30 years time it will be, but right now the laws, regulations etc are all still based on the British system. It probably helps China in a way as it’s a nice bridge for it to the western world. Beijing and Shanghai are becoming more cosmopolitan and westernised and Hong Kong is definitely becoming more Chinese, but having been to all, lived and still living in Hong Kong, I can tell you they are not the same. Just like Macau, which is another SAR, it is also very different from a typical Chinese city. It’s like Vegas on steroids and I’m not joking.

 

[ShropshireLad]

Hong Kong right now is not the same as any normal Chinese city. In 30 years time it will be, but right now the laws, regulations etc are all still based on the British system. It probably helps China in a way as it’s a nice bridge for it to the western world. Beijing and Shanghai are becoming more cosmopolitan and westernised and Hong Kong is definitely becoming more Chinese, but having been to all, lived and still living in Hong Kong, I can tell you they are not the same. Just like Macau, which is another SAR, it is also very different from a typical Chinese city. It’s like Vegas on steroids and I’m not joking.

Fair points, HK. I'm not going to argue the toss with someone who obviously knows the facts.

 

[HKWolf]

So is it safe to assume that FOSUN's investment as a whole depends on Xi Jinping's mood and control, or is there some flexibility? I remember reading Guo Guanchang did disappear a couple years ago for "a few days" while "assisting" in an investigation.

I’m sure Fosun have some flexibility but if the communist party wanted to shut down Fosun I am sure they could in an instant. I was in Beijing last week and couldn’t get google to work. I’m sure it was the national firewall. When I turned up at the hotel my passport was taken away to be copied. Stuff like that. The censorship and control is high even if to a foreigner like me it’s in the background and you can’t see it visibly.

I wouldn’t worry too much though. As soon as the President sees Jota play he’ll be begging for a ticket and telling Uncle Jorge to send Ronaldo our way.

 

[Sedgley Gold N Black]

So is it safe to assume that FOSUN's investment as a whole depends on Xi Jinping's mood and control, or is there some flexibility? I remember reading Guo Guanchang did disappear a couple years ago for "a few days" while "assisting" in an investigation.

FOSUN are in a much better position than most when it comes to this due to their assets outside of China.

The Chinese government are trying to reassert a bit of influence over these huge companies but it’s too late really, they aren’t dependent upon Chinese banks for funds and whilst China could squeeze them on what they’ve already borrowed it would cause huge damage to the Chinese economy, the world economy and destroy China’s reputation as a place to do business with if they pushed them too far.

FOSUN have been extremely clever in how they’ve out grown the control of the Chinese Govt and now they are taking steps to make themselves viable to western investors to completely free themselves from that influence/pressure and it seems as though they see having an extremely successful sports club in their portfolio as a useful tool in a way that American’s use owning NFL franchises.

The other owners in the midlands though are still reliant upon Chinese banks, have most of their assets inside China and have considerably less influence. I’d genuinely be worried if we were owned by one of those.