To that end, the state is expanding its presence up and down the country’s IPO pipeline. The shift reflects how foreign investor influence is fading as Beijing pushes forward with efforts to mould China’s equity capital markets into an assembly line that marshals private funding towards policy goals, with the ultimate aim of producing a new generation of national champions across strategic sectors. In place of the open markets he talked about a decade ago, the environment for raising capital that has emerged in China is increasingly shaped by Xi’s broader strategic priorities – one that is focused on technologies considered central to economic competition with the West, directed by the state and tinged with suspicion about outside influences. A regulatory crackdown in China has lopped roughly $US2 trillion off the market value of listed tech groups over the past 12 months as Xi has railed against the “disorderly expansion of capital”. The unusually sharp criticism from Shan, long a vocal defender of Beijing, comes at a critical time for the country’s capital markets. Shan adds that his Asia-focused private equity group PAG, which manages more than $US50 billion ($71 billion), has diversified away from China. “ think they know better than the market, and many of actions have done real damage to it and to the economy,” says Weijian Shan, one of China’s most seasoned and successful financiers, during a recorded video meeting with brokers held during the depths of Shanghai’s punishing COVID-19 lockdown.

When Xi Jinping revealed his first big policy manifesto after taking the helm of China’s Communist party, he electrified the world of global finance with a call for state-owned enterprises to step back and let markets play a “decisive” role in the world’s second-largest economy.Īnalysts at Goldman Sachs hailed the slate of policy priorities, released in late 2013, as a “bold economic reform agenda” with a “pro-market stance” that would curb government intervention and rein in entrenched state-run businesses.Ĭhina’s President Xi Jinping has railed against the “disorderly expansion of capital”.īut in the years that followed, waves of volatility in Chinese stocks and currency, the threat of financial disruption from upstart tech tycoons and fears offshore listings could breach data security only served to bolster the case among policymakers that if markets are to play a “decisive role”, then the role of the party must be more decisive still.

Throttle syndicate